Namibia’s largest commercial property developers have expressed mixed views on the impact of the current economic challenges facing the country on their businesses.
Oryx Properties Limited Asset Manager, Conrad van der Westhuizen, told the Windhoek Observer that the current economic climate does not inspire confidence and this had pushed the market into a slight over-supply situation.
He said in some instances they have had to negotiate rental prices with tenants, while emphasising that demand for retail space differs from area to area and type of offering.
Oryx currently has a total vacancy rate of 2,7 percent across its property portfolio in Namibia. The NSX listed company is the developer and owner of Maerua Mall and Gustav Voigts Centre, among others.
Broll Namibia Marketing and Public Relations Manager, Sylvia Rusch, said given the current economic climate in Namibia, retailers were naturally more cautious before committing to a possible new store and or expansion opportunity.
Rusch said this cautious approach has translated into a demand for lower rentals.
She added that the reduction in spending from the Angolan market since 2014 had also contributed to reduced trading densities for many retailers.
“There is a lot of unease at the moment with regard to the state of the national economy,” Rusch said. “I think we had a couple of successive years of very good economic growth that led to developers capitalising on the demand created by this euphoria. A lot of retail was developed over a relatively short timeframe.
“To some extent we believe that the retail expansion over the past three or so years has resulted in an oversupply, although we believe that this is mostly linked to the number of retail sites currently operating than the total amount of Gross Leasable Area (GLA).”
Rusch, however, said Broll Namibia, which manages the Wernhil Park, was fortunate in that they strategised around a retail offering that not only speaks to its specific market, but also to the prevailing economic environment by creating new and exciting ventures that are not as negatively affected by reduced consumer spend-ability.
“I firmly believe that the slight oversupply will be corrected by market forces over the next couple of months,” she said.
“The gist of the message is not to create a doomsday picture, but rather to explain that we are experiencing a slight hiccup in our economic journey and by being resilient and considering long term impact of our decisions we will again see the cycle turn upwards.
“We believe that with the upswing in economic conditions, the current challenges within the real estate industry will get some reprieve.”
Although Broll Namibia anticipates a turn-around in fortunes from mid-2018 onwards, Rusch said that they will be very cautious to support more new developments, particularly in Windhoek.
“However, we believe that the expansion of existing retail sites would still add value and is necessary to provide choice to shoppers who have preference over which retail site they frequent.”
Grove Mall of Namibia Marketing Manager, Corlia van Tonder, said they have not experienced a drop in demand for retail space at the mall, adding that she does not agree with assertions that there is an oversupply of property on the market.
She said the occupancy rate at the Grove Mall of Namibia currently stands at 99,5 percent.
“We are very fortunate that space in the Grove Mall of Namibia is still in high demand and that we receive regular queries from retailers looking for space.
“The mall offers a few unique selling points such as the tenant mix, beautiful aesthetics, exciting marketing initiatives, shopper experience and location. Thus the holistic offering is what is currently in demand from the shoppers. With this in mind, tenants are trading very well and retail space is in demand.
“We engage with our shoppers on a regular basis with the aim to understand their needs and demands. We analyse the feedback and adapt or change our leasing, marketing, management strategy to accommodate the shoppers’ needs. We also stay abreast of national and international retail trends,” van Tonder said.