Demand for Industrial Space
Generally speaking, the Commercial Real Estate sector has experienced a drastic decline in demand due to the impact that Covid 19 has had on Industries all over the world. Whilst the Office Sector is currently under extreme pressure, with a dramatic increase in vacancies, the Industrial Sector has seen a slight increase in demand for space. With the success in e-commerce, retailers are selling more products on-line and will require additional space to service the increase in sales. This has a knock-on effect for smaller suppliers that service the large distribution companies.
During lock-down, importing goods from overseas was a major issue, and this allowed local manufactures to step in and provide products previously imported. This is especially seen in the demand for PPE and other related equipment. Tenants are looking for small to medium sized premises with flexible lease periods. We have seen the resumption of a number of new Industrial Spaces, predominantly in the Northern Suburbs of Cape Town. The downside for tenants is that the industrial sector has not seen much concession on rentals like we have seen in the Office Sector
Finding new Office Space
While the office sector has largely fared slightly better than retail, with companies instituting long-term work from home programs and others reconsidering their office space altogether, it’s a great time to be looking for office space. Why? Many landlords have seen new tenant inquiries decline, meaning that they are more likely to be amenable to working out an aggressive deal to renew your lease or to help you move into a new office. We have seen a number of great rental specials on offer to entice new business, and keep existing tenants in their leases.
Work from Home
Many companies still have a work from home policy in place where possible. This will keep the demand for Office Space low for the coming months. We have been in discussion with a number of our clients, and many of them are planning a full return to the office by early next year. With our new infections dropping, businesses are looking at when is the right time to get back to the office. Whilst working from home has many advantages, so does getting back to the office. People have missed the social interactions, networking opportunities that happen at the office. We dont thin k that things will ever be back to normal, so there will be a change in how companies look at their officer space. Now is the right time to be looking for more suitable spaces, that reflect any changes your business may have had during the extended lock-down period.
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