What is Commercial Property? A Guide to Office, Warehouse, and Industrial Space in South Africa

When investing or renting commercial property, many people are more informed about residential market in terms of  houses and apartments. However, commercial property is a different kettle of fish altogether. Hopefully this article by us will explain more to do with the world of commercial property in South Africa, exploring what it consists of, its various types, and what to consider when investing or renting.

What is Commercial Property?

Commercial property, also known as commercial real estate, refers to buildings or land used for business or income-generating purposes. This can include office spaces, warehouses, industrial parks, retail centers, and many other different facets. The primary goal of commercial property is to generate revenue through rental income, capital appreciation, or business operation, just to name a few.

Types of Commercial Property in South Africa

Office Space: Office buildings, business parks, or sectional title office parks. Examples include Sandton office towers and The Didata campus.

  • Warehouse Space: Large storage and logistics facilities for goods, merchandise, or equipment. These industrial nodes have expanded drastically and many new nodes have opened up to the market . Some examples would be Longlake industrial park, Water Logistics Precinct and Samrand.
  • Industrial Space: Manufacturing facilities, factories, or workshops. Typically located in industrial parks or zones, such as Rosslyn or Isando. The reason for this is most of these high power demand is only accessible in the older established warehouse areas.
  • Retail Space: Shopping centers, malls, or strip malls. There seems to be a movement from the large malls to more lifestyle convenience centers.
  • Mixed-Use Developments: Combining residential, office, and retail spaces in one complex. A great example is the Melrose Arch precinct , where Work , Play and Live intermingle.

Important Factors of Commercial Property

  • Position: Proximity to transportation, business districts, or consumer markets. Access to highways is becoming one of the most important drivers these days due to the traffic congestion.Size and Layout: Configurable and Hybrid spaces to accommodate various business operations.
  • Amenities: Security, parking, access control, and utilities.Backup water and electricity , very important factors.
  • Zoning and Regulations: Compliance with local municipal bylaws and zoning regulations.

Benefits of Investing in Commercial Property

  • Rental Income: Regular returns through lease agreements.
  • Capital Appreciation: Long-term value growth.
  • Tax Benefits: Depreciation and tax deductions.
  • Diversification: Spread risk across different asset classes.
  • Return on investment in many cases more favourable to residential investments.

Things to Consider When Investing or Renting Commercial Property

  • Market Demand: Understand local market trends and demand.
  • Property Condition: Assess maintenance and renovation needs, as well as the tenant mix within the property or property node.
  • Lease Terms: Negotiate lease agreements. Speak to us . We know how to sharpen those landlord’s pencils.
  • Professional Advice: Consult with Our Commercial Property experts at Turnkey Commercial Properties.

South African Commercial Property Market Overview

South Africa’s commercial property market has experienced fluctuations due to economic and political factors. Covid considerably knocked the property sector. Things are thankfully returning to normal.  However, opportunities exist in:

  • Growth Nodes: Areas like Waterfall City , Bryanston , Longmeadow, Samrand, Hyde park just mentioning a few.
  • Logistics and Distribution: Warehousing and industrial space near transportation hubs and easily accessible, and suitable roads.
  • Office Space: Demand for premium office space . There is a post covid trend of companies wanting to be closer to residential areas , making it easier for staff members to be attracted back to work.

Taking the above into consideration Turnkey Commercial Properties is more than willing to take you down this Journey. Get in contact to explore our full bouqet of services.

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