Office space in demand
There are positive signs for Windhoek’s property market as there is an increase in demand for office space, particularly in the city’s central business district (CBD) area.
“The demand within certain strategic areas of Windhoek is relatively strong,” says Marco Wenk, managing director of Broll Namibia Property Management.
According to Wenk, these areas are located mostly within the southern parts of the CBD, with the south of Windhoek becoming a focus area for office tenants looking for prime office space.
The demand is so high that currently, there is no more rental offices available after the expansion and upgrading of the Wernhil Park Shopping Centre, which was officially opened in December 2011.
“Wernhil Park Shopping Centre is fully let, with a high demand from retailers to obtain space,” Wenk said.
The BPI House Building and Mutual Platz are temporarily full due to the upgrading of the agricultural bank, which has approximately 4000m² available. Also, the FGI Building, which stood empty for a long time has now been filled by the National Planning Commission.
“More space is needed for business,” said Jerome Joseph, director of marketing at Joseph-Snyman Real Estate Company.
According to Wenk, the high demand for office space (rental) can be attributed to the fact that in general, company owners understand that property ownership does not form part of every companies’ core business.
“However with the lower interest rates and higher rental costs per square metre for office accommodation, many businesses do tend to consider this option more often,” he said.
Alternatively, some companies erect their own offices which is creating an office space vacuum in the CBD. “For example, the auditor general is busy erecting their office building which will be finished soon and will leave about 2000m² of space available,” Joseph said.
Office space rental prices vary. On average, the office space rent price per square metre ranges between N$120/m² to N$150/m², Wenk said.
According to Joseph, C-grade buildings and B-grade buildings cost about N$90/m² and N$150/m² for A-grade buildings, while industrial space rent prices ranges from N$40/m²to N$45/m² in the Northern Industrial area and N$50/m² to N$60/m² in the Southern Industrial area. In the Prosperita area, the price range is N$50/m² and N$35/m²to N$40/m² at Lafrenz.
Rental prices have remained stable over the past two years, even though rent charges are determined by several factors including location, office grading, size, new versus old building amongst others, Wenk said.
“Ultimately office space, as with any other commodity, is demand driven. As long as there is no major over-supply and a steady demand, prices will remain stable,” he added.
Joseph maintained that the demand for office space outside the CBD is steady, with the demand for office in the CBD highly affected by parking space problems and oversupply.
He projects that rental costs for office space will decline in the CBD in the future due to oversupply, “but industrial space rentals will still escalate due to a demand thereof.”