Recent research by CBRE has revealed global
retailers as well as retail property investors are seizing advantage of South
Africa's appeal as a competitive retail destination.
This is as it was reported that South
Africa is presently ranked at 53 out of 61 countries in terms of international
retailer presence - up 14% during 2013 – As reported by the director of
research and marketing, Elaine Wilson at Broll Property Group, part of the CBRE
affiliate network.
The increased
ranking indicated growing interest from retailers around the world.
Johannesburg
has the highest volume of global retailers and includes recent entrants such as
City Chic, H&M, Lush and Lovisa.
Over the last year, Johannesburg
has shifted from 146th to 145th of 189 global cities in terms of international
retailer presence. Meanwhile, Cape Town has moved up three places to 153.
South
African retail property also yields competitive results for investors.
A typical
regional or super-regional shopping centre of South Africa has on average, a
2.2% vacancy in comparison to 6.5% and 12.4% in the US and UK respectively. The affordability of retail rents is promising of room
to grow net incomes for retail property investors.
Hong Kong values
$46,642 per square metre each year as the top retail destination in the world,
as South Africa values around $314 per square metre each year.
In terms of
Sub-Saharan African context, South African property gains stronger net rents
than Kenya, Malawi or Namibia.
However, South Africa is not in
line with Ghana, Madagascar and Mauritius’ high rents, although these markets are
limited in retail space.
South
Africa's retail space is also advantaged in annual net rent rises of 7% to 10%
which are generally higher than other retail markets within the region. Similarly,
operating cost rises run at 7% to 10% a year.
South
Africa's property operating costs are somewhat high at $80 per square
metre each year, but are mitigated by rises unusual in numerous other
Sub-Saharan African property markets.
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