Demand for retail space soars in remote towns of Eastern Cape
SA Commercial Property News - May 3rd 2013, 09:27
The demand for retail space across remote towns in Eastern Cape such as Sterkspruit, Mthatha and Tsolo formerly known as the Transkei has accelerated, according to JHI Properties.
Retail developers and Financiers are looking forward to another good year this 2013 on the back of the country’s robust economic development, which has been driven by consumer spending.
Amanda De Lange, portfolio manager of JHI Properties in Port Elizabeth reports that currently JHI has been receiving a high number of enquiries for retail space in Sterkspruit and Mthatha, mainly as a result of a pent-up demand as well as growing passing trade.
It also appears that national retailers, who may perhaps have saturated the market in major centres, are now looking at outlying areas with potential.
Says De Lange: “In the Port Elizabeth area we are currently seeing more positive economic sentiment. Generally, we are experiencing a very low vacancy rate in retail space in Port Elizabeth."
De Lange says there is no doubt that Coega is attracting business to the Eastern Cape region. Famous Brands are in the process of developing some 4000 square metres at Coega, while FAW Trucks are establishing a manufacturing operation.
East London is experiencing a demand for retail space in strip malls in the CBD,” adds De Lange.
She says trends noted in the East London market include a current higher demand for retail rather than office accommodation. “There is an increase in small business development and incoming entrepreneurs seeking retail space, while national retailers are tending to seek smaller space than previously.
“At present there are opportunities to lease space at very competitive rentals in conveniently situated locations. While purpose-built premises may be best for operational requirements and more cost effective to run, the capital outlay involved can be prohibitive. In addition, vacant land which is available for such development is usually located out of town and further from national and main roads.
“Conversely, premises which are available to rent are usually more centrally situated and while large units are perhaps scarcer than smaller units, the rental rate is certainly more cost effective than building. This is combined with the advantage of repairs and property rates remaining the responsibility of the landlord,” concludes De Lange.
By SA Commercial Prop News
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