Only the brave –or the foolhardy – would build an office without a plan, such as having a tenant, or anchor tenant, lined up, said Org Geldenhuys, MD of property marketing and development company, Abacus DIVISIONS.
“Although there are areas in the office property market where business is good, there is still, in general, a high level of vacancies. This means that if one simply builds an office, there is no guarantee that a tenant, or tenants, will be found.If one is going to speculate, then speculate on a small scale.”
The successful developers are always the ones with a plan in hand.
Issuing a caveat, Geldenhuys said that investors should avoid developing bespoke buildings.
“It might sound extremely exciting – and lucrative – but a bespoke building could be a disaster waiting to happen – because there might not be any demand for it in the future.”
It appears the sweet spot in the office property market is a 150 square metre office. So, when developing a building, divide it up into units of 150 square metres.
This blueprint, according to Geldenhuys, is literally recession-proof – as there will always be demand from tenants.