The Oshakati Game shopping centre in Oshakati, Namibia.
With stricter credit laws in place and an economy less affected by the recession than South Africa, Namibia’s commercial property market has remained stable and resilient over the past year, says Monica Pienaar, manager for JHI property services company in Namibia, operating from offices in Windhoek.
Over the past year the company has concluded transactions for the lease of about 26 000 m2 of office and retail space.
The company also operates in Oshakati, Ondangwa, Oshikango, Rundu, Katima Mulilo and Swakopmund and manages a number of high-profile properties for private companies and pension funds.
Pienaar says Namibia is fortunate in that the adverse economic conditions have not had a major impact on the country’s main sources of income, namely mining, tourism and agriculture.
“Although the annual inflation rate of seven percent in December 2009 was reduced compared to 10.9 percent in December 2008, it is estimated that during 2009 Namibia experienced minus 1.9 percent growth. However, although the hospitality industry reported an approximate 15 per cent decrease in the number of visiting tourists during 2009, this was not the sharp decline that was expected because of the global economic crisis. Housing has held up well with annual growth in house prices of 23 per cent since October 2008. What is of concern is increased unemployment and the likelihood of electricity price hikes.
“Over the past year there has been a good take-up of vacant commercial space – with retail space in particular remaining in demand. During this period rentals have steadily escalated at an average of about eight percent for office and retail space,” she says.
Office accommodation in major centres such as Windhoek range in price from about N$85-130 a square metre, depending on the grading of the space.
Pienaar says a trend that has become evident in Windhoek is the rezoning and conversion of houses on the periphery of the CBD to smaller office buildings. This is because parking in the city centre is limited, and also businesses prefer, wherever possible, to own their own property rather than lease space.
JHI reports a consistent demand for office accommodation in Windhoek, with space recently leased to the International College for distance learning (Intec – which includes Damelin and the Career Development College), the Government of Namibia, Namlife (part of Sanlam), and South African Airways.
The Namibian government is upgrading a number of existing buildings or demolishing old buildings to construct new multi-storey buildings, which is enhancing the city. However this may create an increased supply of vacant space as government departments move into their own buildings.
Pienaar says: “In the northern town of Oshikango, the demand for retail rental space has increased as a result of cross border trade, with a constant stream of day shoppers coming into the town from Angola. There is also a significant demand for retail space in the town, which is resulting in new developments - with a new centre recently launched as a consequence.”
She says a further positive indicator for the retail sector is the fact that several major national South African retailers are increasing their footprint in Namibia. The Oshakati Game shopping centre, which is managed by JHI, is being extended by about 1 700 m2 and has already been taken up by various retail outlets, including Edgars. Mr Price has relocated to larger premises in the centre, and its vacant space has been taken up by Truworths, increasing the size of its existing store. Pick n Pay is planning an upgrade of its store and JHI reports further enquiries and demand for vacant space in this sought after centre.
In addition, construction of the extension of the Oshikango Ellerines centre, which is also managed by JHI, is already underway. The new area will accommodate Pep Stores – which will relocate to more spacious premises of approximately 1 000 m2 – and Spar. In relocating to the new area in the centre, Pep Stores’ existing shop space will be taken up by other lines in the Pepkor group, which are already represented in the centre but wish to expand.
Pienaar says rental rates for retail space varies between N$120-250 a square metre in Windhoek and from approximately N$100 to N$180 a square metre in the north, depending on the size and location of the shops.
Call Monica Pienaar of JHI Namibia on 002 6461 252095 or email monica.pienaar@jhi.co.za.
