PROPERTY MANAGEMENT
Factors to consider when renting or buying office space
By Brett Marlin
If you are intending to rent or buy office space it
is important to understand what grade of office
you are looking for as well as understanding what
grade of office you are being offered.
It is really very easy to make an error when
comparing offices. Often people decide to rent
the cheaper office suite only to find out later
that the cheaper option is actually the most
expensive option.
My late father used to say, “There is only one time that you are happy
when you buy something cheap and that is when you buy it.” This is not
always the case, but it’s a good saying to bear in mind.
top of the range in the metropolitan areas where they are located. The
following should also be taken into account in determining whether
the building is A-grade or not: consider whether the building has a
good quality lobby finish, quality access to/from an attractive street
environment and other similar factors, such as safety and security.
Buildings are categorised depending on what sector of the market they are
in, the size and age of the unit, their usage type, what features they have
as well as where they are located. It’s important to know what a building’s
classification is as it can affect what rentals are being charged within a
specific area. It also gives you, the tenant/buyer, an indication of what you
should be getting for your money when you rent or buy the building or office.
An example of this type of building is “Prime Plaza” in the CBD which
has finishes as per the P-grade but does not have the green building
add-ons.
• B-grade: Generally older buildings, but accommodation
and finishes are of reasonably modern standards as a result of
refurbishments and renovation from time to time, air conditioned,
on-site parking. These building are generally in a slightly less
desirable area, but not always. They can be badly designed or
poorly finished buildings in an A-grade area, such as one or two of
the buildings in the new CBD.
• C-grade: Buildings with old style finishes, services and
building systems fall into this category but also buildings that are
in a poor area such as Kgale Mews area, the Main Mall and
Old Lobatse Road. They may or may not be air-conditioned or
have on-site parking.
• D-grade: A building reaching the end of its functional life; old
and in poor condition; near the bottom of the rental rate range;
typically, no air-conditioning and no on-site parking; may have
good location. These buildings are typically found in areas such as
the Main Mall, African Mall and Old Lobatse Rd.
Building classifications for commercial properties
Until recently the top rating for a building was an A-grade office, but
recently with the trend towards green buildings a new rating has come
into play in the market, the top rating is now Prime grade or P-grade.
Let me shed some light on the different ratings.
The most commonly accepted building classifications according to definitions
as set out by Sapoa, (The South African Property Owners Association) is:
• P-grade (Prime grade): This is a new grade of building
which has come into existence particularly with the latest trend, the
green building. This is a top quality, modern space, generally, a
pace-setter in establishing rentals and includes the latest or recent
generation of building services, ample parking, a prestigious lobby
finish and attractive views or a good environment.
A prime example of this is the Bank Gaborone and Capital Bank
buildings, which are planned and built as green buildings and
include features such as chilled water air conditioning systems,
building management systems, fresh air supplies into the building,
generators, a design to incorporate solar power generation, to
name a few of the features.
•
A-grade: These buildings are not older than 10 years or have had
recent major renovations. They feature high quality modern finishes, air
conditioning, adequate on-site parking, with market rentals near the
ISSUE 33 - MARCH 2018
These grades might be further sub-divided into sub-grades A+, A-, B+,
B-, C+ or C-.
There is also the issue of tenant allowances that is important when
considering what to rent or buy, but I will cover this in another article in
the next issue.
Remember, you get what you pay for.
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