South African retailers and office tenants are still paying significantly less to rent their business premises than any of their counterparts in Europe, Middle East or the rest of Africa.
In fact, the average Johannesburg shop owner pays less than 4% on monthly rent bills than that of retailers in London’s West End in the UK, according to a report from Broll Property Group, part of the international CB Richard Ellis Network (CBRE).
Broll and CBRE’s Rents and Yields report for third quarter 2010 shows that prime retail rents in Johannesburg, Cape Town and Durban currently average (in euro terms) €253,14/sq m/annum, €316,42/sq m/annum and €354,39/sq m/annum respectively. In rand terms, that translates into an average monthly rent of R200/sq m, R250/sq m and R280/sq m, given the rand/euro exchange rate of R9,50 used in this report.
That compares to London’s West End where retail tenants currently have to fork out a whopping R5 570/sq m/month the world’s most expensive shopping node in terms of rent/sq m. The French capital of Paris, Zurich in Switzerland and Moscow in Russia also rank among the priciest destinations in which to rent floor space in the whole of Europe, Middle East and Africa. Monthly rents for prime retail space in these three cities exceed R4 400/sq m.
The only cities where retail rents are roughly in the same ballpark as that of Cape Town and Durban are Oporto in Portugal and Sofia in Bulgaria, with monthly rents averaging between R332/sq m and R380/sq m.
Johannesburg, Durban and Cape Town are also the cheapest destinations out of a total 55 cities tracked by Broll and CB Richard Ellis in which to rent office space, with monthly rents varying between R110/sq m and R140/sq m. London’s West End, Paris and Dubai in the United Arab Emirates rank on the other end of the cost scale.
Office tenants in those cities pay between five and seven times more on average than their South African counterparts. Office tenants’ monthly rent bills on the West End, Paris and Dubai respectively come to R835/sq m, R610/sq m and R596/sq m. - Joan Muller
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