Property valuation is helpful for knowing your property’s price

The majority of Africa’s industrial markets suffer from a lack of high grade infrastructure and the instability of many of the continent’s economies. Many commercial centres lack the sufficient industrial/logistics stock to attract tenants and a high level of caution is exercised by international investors.

Botswana’s economy has stalled after several decades of growth fuelled by the mining industry. Occupier demand for industrial property has suffered as a result, leading to downward pressure on rents in Gaborone which has been exacerbated by an oversupply of space in the market. Botswana’s second city, Francistown, has a limited availability of industrial stock. Alternatives exist well outside the city centre, but tenants are wary of locating too far out due to security and labour transportation concerns.

Demand for industrial space in Zimbabwe has been tempered by small enterprises, largely family run, established in response to economic hardships and the withdrawal of many major occupiers. Interest from large scale operators in Malawi is also limited as a number of important manufacturers have ceased operations over the last decade.

In East Africa strong localised demand exists, notably in Kampala and Dar es Salaam, with the creation of the East African Community Trade Area encompassing Kenya, Tanzania and Uganda aiding growth in the region.

The second general election in June 1999 marked a smooth political transition and was the tonic needed to consolidate the democratic drive and boost international investor confidence in the country. With the continuing trend of decentralisation taking place since the 1980s, the traditional downtown CBDs in the main cities have experienced a severe downturn, with Johannesburg hit the hardest. A number of major corporates are backing up organisations such as Business Against Crime and the Johannesburg Inner City Development Forum. find here properties price.

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Of the major commercial property types, retail has turned in the strongest performance over the past three years. In the US, this is evident from a glance at the NCREIF Property Index, where retail has gone from worst to first. Part of the reason for this is that consumer spending, which generates take-up of retail space, has held up remarkably well in developed countries. By comparison, business capital spending, which is closely linked to demand for office and industrial space, has fallen sharply.

Low interest rates across the world have encouraged consumers to spend. Nowhere is this more evident than in the housing markets, where sales and prices have surged in most corners of the globe. Home sales generate consumer spending as new homeowners visit furniture and home improvement stores to fix up their new abodes.

Competition among retailers has been intense in the US since the mid-1980s when big-box retailers began spreading across the landscape, siphoning sales from independents, small chains and traditional department stores and valuation services Now this competition is being repeated around the world. Discounters are flourishing, forcing other retailers to find their market niche or face oblivion. Department stores catering to the middle class are losing customers at both ends

It seems as if the world’s middle class no longer wants to be thought of as ‘middle.’ They splurge in expensive boutiques at the same time that they scrimp at the discounters or buy in bulk from the warehouse clubs. In the US, Wal-Mart, Target and a handful of other retailers have cornered the low-price market, while high-end retailers have siphoned wealthy shoppers and those who want to appear wealthy. Squeezed in the middle are department stores such as Sears and JC Penney along with struggling discounters such as Kmart, which are scrambling to defend their shrinking niches.

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The consensus economic forecast for the US economy points to continued GDP growth in the 3% to 3.75% range in 2006/07. This pace of growth implies total employment gains of about two million each year. Office employment will increase by about 600,000 each year, implying annual absorption of nearly 125 million sq ft. These projections are based on a slowing of employment growth in the latter part of 2006 and in 2007, although this slowing has not yet been seen in the early 2006 employment statistics.

Based on current levels of construction activity, demand for space will be double the amount of new space added to the market in 2006 and 2007. This is expected to lead to a decline in the national average vacancy rate of 1.25 percentage points by late 2006 or early 2007. With the national vacancy rate approaching 10% by mid-2007, rents will then start to increase more rapidly.

For New York City, the vacancy rate declined by nearly three percentage points in 2005, with nearly 10 million sq ft of office space being absorbed. Other property conveyancers are finance and business professional services sectors recorded employment growth in the range of 2.5% to 3.5%. In addition, the demand for space from the education and healthcare sectors was strong. By the end of 2005, employment among the legal services firms also began to increase.

The New York City and Washington, D.C. property sectors were the stars in this region of the US in 2005. However, even for these solid performers, some substantial differences in the respective market characteristics were apparent.

The demand for complex business reorganizations and refinancing is accelerating in the US economy, and this demand plays to the strong points of the New York City business sector. Several major New York City- based financial firms have already announced that they anticipate increasing their employment levels by 8% in 2006. With these projections of employment growth, the vacancy rate should decline by two more percentage points by early- to mid-2007.

It will not be until late 2007 or 2008 that this space starts to become available for occupancy. There are many plans in the works for new development, but this space cannot reach the market until 2010 or later. Clearly, the strength of the New York City office sector has been enhanced by this lack of new supply.

The Washington, D.C. metro office market has also been performing strongly. It ended 2005 with a vacancy rate of 9.2%, down from 10.5% at the beginning of the year.