Tuesday, March 2, 2021

CBD changing Gaborone rental market – Knight Frank

The emergence of the Central Business District in the heart of Gaborone has seen a significant decrease on rental values for ageing or secondary grade business accommodation, a property consulting firm has said.

Knight Frank stated in its Africa Report for 2013 titled, ‘The Ascent to Wealth’ that the oversupply of office space in the swankier CBD buildings has led to the collapse in the lower areas of the city.

“Some buildings in the old heart of the capital have seen rental values fall by approximately 50 percent from their peak in 2010,” the property firm said in the report.

“In contrast, the take-up of new offices in the CBD has been strong with major corporate occupiers, small professional practices, parastatal organisations and public sector bodies all contributing to the mix of tenants and owner-occupiers”.

Top buildings that are changing the city’s landscape include Masa Centre, iTowers, Exponential, and a host of other skyscrapers. This has led to the delivery of tens of thousands of square metre to the market within a relatively confined period.

On the other hand, the retail sector growth has been tremendous in Gaborone with the arrival of new malls. The most notable of these are Airport Junction and Rail Park Mall in Gaborone, which have introduced some new retailers and food outlets to the country.

However, Knight Frank stated that despite the delivery of new shopping centres, there is still a lack of diversity with little difference in the offering at each mall.

“Nonetheless, occupancy in the main shopping centres remains high and demand from retailers for good quality centres across the country continues unabated,” the report read.

Demand for residential space continues to grow on the back of expanding diamond industry Gaborone.

“The residential market in Gaborone remains robust with prices rising both in terms of rentals and capital values. The expansion of the diamond industry has led to an influx of ex-pats coming into Gaborone and this has resulted in high demand for properties in the prime areas of the city, especially Extensions 9 and 11, The Village and the Phakalane Golf Estate,” said the Report.

The high level of demand, Knight Frank said, has opened up development opportunities and interest is also being observed in areas outside Gaborone such as the Lion Park, Mokolodi and Gaborone North, where plots are being sold at more affordable prices.

The property consultancy group said zoning and increased office supply is now changing the industrial market.

“Zoning is now being more stringently applied, which in conjunction with an increased supply of offices, is changing the nature of the market. A small amount of construction of new space is being seen in locations within 10 km of the city centre and en route to the airport, mostly for owner-occupation,” stated the Report.

Industrial activity in Botswana continues to be confined to Gaborone where inflated prime rents have been achieved in the past due to office occupiers utilising light industrial locations.

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