Real Estate Investor Magazine South Africa September 2018 | Page 45

COMMERCIAL

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he South African property market is not immune to the worldwide structural trend of consumers increasingly choosing to shop online instead of at their local mall . What are the implications of this trend for the South African listed real estate sector and for investors who hold this sector in their investment portfolio ?
South Africans have seen the rapid rise of online retailers such as Yuppiechef and Takealot , among others . These online stores offer a convenient and safe shopping experience with better choice than is available at the local mall at times . Traditional sit-down and quick service restaurants face similar headwinds to conventional retailers — fewer feet walking through malls mean fewer hungry mouths to feed at shopping centre food courts .
Retailers need to adapt to incorporate the online user experience Suppliers and distributors that service these establishments are finding that their customers require less frequent or fewer deliveries . Daniel Gerdis , equity analyst at Foord Asset Management says the challenge these retailers face is how to earn a reasonable return on capital invested in inventory and fitting out and refurbishing stores that are frequented by fewer customers .
“ Traditional retailers are having to adapt their offerings to incorporate aspects of the online user experience into physical stores . One such initiative is Click and Collect — the process by which an online order is collected at a physical store . It offers the convenience of online shopping with faster availability and flexible collection times , while driving footfall into the store to facilitate cross-selling opportunities . The downside for mall owners is that retailers require less store space .
Restaurants and food retailers are also making changes to their business models . The new trend is dark stores — restaurants distributing entirely via food delivery apps with no shop front .”
“ For mall owners , digitalisation is an added headache that did not exist just a decade ago ,” says Gerdis . “ Malls must now compete to remain a relevant and attractive destination for shoppers . One approach taken internationally is to create a differentiated shopping environment for the customer by introducing new concepts such as pop-up stores , free wi-fi and unique haptic retail experiences that cannot easily be copied by online retailers . This comes with added cost and risk .”
According to Gerdis , in the office segment , space has steadily expanded at an average pace of one percent per quarter for the past 15 years . But digitalisation now offers workers increasing mobility and flexibility in how and where they work . Corporates are adapting to this changing environment innovatively , with shared workspaces , hot-desking or by allowing employees to work from home . “ This implies divergence in the size and type of office space demanded by prospective tenants from what landlords have traditionally supplied .”
Changing consumption patterns mean changing investment patterns . “ These changing consumption patterns are headwinds to the South African listed retail and office property sector and investors should take a pragmatic investment approach in the sector — by choosing property counters that sidestep the retail and office segment risks and instead benefit from the long-term themes of urbanisation , digitalisation and densification . Segments that fit these criteria are warehousing , logistics and self-storage ” concludes Gerdis .
Emira launches V2.0 of South Africa ’ s only commercial property leasing app for brokers
Emira Property Fund has launched V2.0 of its innovative app - the first and only one of its kind in South Africa that provides real-time information about properties to make it easier for brokers to conclude leasing deals successfully .
Geoff Jennett , CEO of Emira , says : “ We believe this app is a competitive advantage for brokers , and thus for Emira too . The response from commercial real estate brokers to the earlier version of the app was very positive . Now the refreshed , rebranded app is keeping with rapidly evolving technology . We believe it will ease the leasing process for brokers even further by putting the information they need and value the most at their fingertips . The updated app will ensure that doing business with Emira continues to be a rewarding experience for brokers .”
One of the most popular functions of the app has proven to be the access to Emira ’ s vacancy schedule . This function shares up-to-the-minute information with brokers about the availability of its properties , giving them immediate updates with changes . For space to let in the Emira portfolio , the app lists premises and their rental rates . These are searchable and filterable by size , region and property type .
Another top feature of the app has proven to be its downloadable resources . This enables brokers to provide their clients with an information pack that gives them a full picture of the property .
Now the app also highlights Emira ’ s innovative leasing initiative aimed at selected properties for the office market , The Intelligent Relocation , which offers tenants eight months of their total first year ’ s rental in incentives on a three-year lease , or 14 months rental in incentives on a five-year lease . It is made up of a rent-free period for fit-out and settling in , and a tenant installation allowance for layout configurations and customisation .
The Emira app is available for Android & IOs operating systems , with tablet and smartphone versions for both platforms . It is free to download from the Android and IOs App Stores - simply search “ Emira ”.
SA Real Estate Investor Magazine SEPTEMBER / OCTOBER 2018 43