Saturday, July 13, 2024

Residential rental market declines in Q1:2023

The residential rental market showed signs of deterioration in the first quarter of 2023 compared to the fourth quarter of 2022, indicating a decline in rental of upper end properties, according to the latest Ribbery report for the first quarter of 2023.

The rental market for low-end properties continued to enjoy reasonable demand, while mid-level houses for rent experienced weaker demand and increased supply, according to the Ribbery report. The average price for residential properties sold in the first quarter of 2023 increased by 0.6 percent to P834 973, compared to the previous quarter, reflecting an increase in the number of high-valued properties traded in the quarter under review

However, the market for office space remained weak due to increasing supply from completed construction developments, such as the Innovation Hub, Pinnacle Park and Botswana Accountancy College North campus. In addition, demand remains reasonable and slightly improved as government took up some vacant properties.

“However, the merging of some parastatals is likely to curtail the growth of demand for office space by Government. In addition, there is a possible likelihood for a slowdown in uptake at the Central Business District (CBD) should Government institutions remain in their current premises and location. Furthermore, the supply of office space is projected to increase, given the ongoing construction projects and planned office buildings at the Gaborone CBD, such as by the Botswana Stock Exchange and Botswana Building Society Limited,” said the report.

 The Ribbery real estate valuers said this will further exert downward pressure on rentals, especially in the decentralised office locations. Similar to the previous quarter, the demand for retail space remained fair across all market segments, while the supply is expected to increase, as two malls are proposed for Mogoditshane. In addition, other centres with good demand for retail space are Jwaneng, Selibe Phikwe, Maun, Letlhakane, Francistown, Mahalapye and Lobatse.

“Most of these locations have a few retail schemes, to be anchored by reputable supermarkets, at planning or construction stage. Regarding industrial property, the supply of unoccupied big warehouse space has decreased, while the demand has improved. Meanwhile, the demand for industrial space in prime locations is expected to improve going forward,” according to the Ribbery report.

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