AN ANTICIPATED drop in interest rates later this year could fuel an increase
in the number of entrepreneurs seeking to purchase their own properties.
Many entrepreneurs have indicated they would like to buy the properties they
are renting when they become more affordable, says Willem Bosch, chief
operating officer: Business Partners Properties.
Bosch says many small business people have paid high installation costs. It
therefore makes business sense for them to buy the property they already
rent, rather than to buy elsewhere and have to pay the high costs of
relocation.
Customers also become familiar with an established business address.
Bosch says one of the most effective ways of providing added value to an
entrepreneurial business is to provide access to property investments,
either for own use or as a secure risk hedge.
Stephen O'Raw, key accounts executive of JHI Real Estate, says companies can
reap significant benefits from viewing their property commitments from both
a tactical and a strategic point of view.
A typical business will acquire space when times are good and shrink when
times are bad.
"The difficulty lies in the length of that cycle, which does not always
match the lease lengths entered into, or results in a need to dispose of
property during a dip in the market."
O'Raw says it is important that real estate and its occupancy be seen as a
strategic issue that should form a part of the business plan.
"The drive to approach property from a strategic point of view rests on the
assumption that long-term cost containment in occupancy costs is a
fundamental means of improving value to shareholders. Shortterm tactical
options, while they can reap significant benefits, are not always repeatable
and can be detrimental to productivity."
Publisher: Business Day
Source: Business Day
AN ANTICIPATED drop in interest rates later this year could fuel an increasein the number of entrepreneurs seeking to purchase their own properties.
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