By Edward West for IOL
Commercial property tenants will have the ability to bid for prime office space via AuctionInc’s online auction platform for the first time in South Africa, AuctionInc chief Ari Ben said yesterday.
He said the launch of the platform locally followed the success of a derivative of the concept in the US and Europe to fill large vacancies in prominent office buildings.
The South African leasing market is in a difficult position due to an oversupply of office space and flagging demand from potential tenants.
Rode’s office market survey showed the decentralised vacancy rate for A- and B-grade office space combined rose to 14.8 percent in the fourth quarter of last year, pushing the average for last year to 13.9 percent.
The Covid-19 pandemic exacerbated the decline in demand for office space as tenants opted to work remotely. On a positive note, more businesses were looking to return to an office setting as lockdown restrictions ease. Many businesses were also finding it unrealistic to operate remotely over the long term, said Ben.
“The auction industry has reached a high level of maturity and, for the first time, the leasing industry stands to benefit as a result. It is my view that online lease auctions will become the standard method for landlords and tenants to transact in the near future,” said Ben.
Benefits of auction include increased exposure and focus on the asset, a transparent method of transacting and an efficient method of benchmarking value.
AuctionInc is due to host its inaugural office lease auction on behalf of Redefine Properties from November 8 to 12. More than 10 000m² of prime office space across eight office parks in Bryanston, north of Johannesburg, is scheduled for auction.