As per the latest Global Commercial Property Monitor (GCPM), sentiment improved in the final quarter of last year among professionals working in the global commercial real estate sector, returning to positive territory for the first time since the onset of the pandemic (-28 in Q1 2020 to +01 in Q4 2021).

Optimistic about the opportunities in South Africa’s commercial property market is Franz Gmeiner, Chief Executive Officer at Orion Real Estate. “Given the country’s tough economic conditions, compared to high-risk stocks and shares, commercial property remains a more reliable form of investment with capital growth over time, especially with certain sectors such as industrial and offices. The key is to stay focused on the long-term future and be versatile.”

Trends that will affect the domestic property market in 2022.

• Partial return to the office as the pandemic tapers.

• Exponential rise in online retail trade.

• Repurposing commercial properties to meet rising warehousing and residential demand.

• Concerns about environmentally sensitive properties

Office far from dead 

As firms adopt a hybrid approach to remote working and adjusted lockdown regulations boost a return to the office, the commercial office space is far from being a relic of a bygone era. Many companies are repurposing their spaces or have added new amenities to accommodate the new workplace norms.

“It has become apparent that the commercial office has a role to play for team meetings and other collaborative endeavours. The market is telling us that while many folks will still work from home, an office space is also helpful for colleagues to interact and enhance teamwork, innovation as well as productivity”.

However, offices will now be smaller, with social distancing in place. “Hot desk type services and systems that allow workers to book a desk for a day will also play an increasingly vital role in commercial properties of the future.”

READ MORE: 5 Sectional Title insurance realities highlighted by the KZN floods

Repurposing buildings 

Another trend that will impact the commercial and industrial property sector in 2022, which had already gained momentum in recent years, is the repurposing of commercial property into warehousing space and last mile distribution centres to meet the burgeoning online shopping market.

A functionally obsolete building can easily be repurposed into a productive, profitable space. However, there is a desperate need for the government to intervene in some areas which are facing a climate of disintegrating infrastructure that is not conducive to business.

Focus on sustainability

South Africa’s commercial and industrial property sector is on the path to rapidly increasing its green building credentials. Local property firms have noted an uptick in demand for commercial and industrial properties that are more environmentally sustainable.

In April 2021 MSCI South Africa Green Annual Property Index results reinforced the association between quality and green-certified buildings, as reflected by a higher capital value per square metre, more resilient capital growth and a higher net operating income per square metre compared to the non-certified office buildings.

“There is definitely a business case for leasing and buying properties with environmentally sensitive features. The research has repeatedly shown that firms that are proactive regarding environmental sustainability tend to achieve higher financial returns. There is also, for example, the day-to-day financial saving on the cost of energy, due to the use of more cost effective renewable energy.”

READ MORE: Selling your home as equity for a new home

Operative infrastructure

A concern is our country’s infrastructure, “Currently we are seeing in KwaZulu-Natal, Gauteng, North West and the Free State in particular that poor performing municipalities and provincial governments are not keeping up with road maintenance and water service delivery requirements. This has a negative impact on businesses in the region, which then seek greener pastures in other provinces and shut-up shop, resulting in job losses.

Municipalities need to find ways to work with businesses to ensure that infrastructure is adequately maintained not only to attract new business and property development, but to retain existing commercial and industrial enterprises.”

Commercial property and development only works if good infrastructure supports it. “As a crucial component that connects businesses to their markets and employees to their work, adequate infrastructure is a key contributor to economic growth.”

READ MORE: What is a bank guarantee when buying a property?

READ MORE: Tops tips when working with a general contractor

READ MORE: Lease funding: Get the cash you need today from tomorrow’s rental payments

SUBSCRIBE: to our content here