Gaborone’s office market is entering a new phase as substantial new development is leading to the creation of a new CBD in the heart of the city. The delivery of various new projects over the next 24 months will provide occupiers with an unprecedented choice of facilities in central locations. However, the scale of development and the amount of speculative space being constructed will see rental growth curtailed. This comes at a time when government occupiers, a major driver of the local market, have been forced to freeze requirements in light of austerity measures. It is possible that a two tier market will emerge as demand from high grade occupiers is likely to focus on new space in the CBD and Gaborone’s premier business parks, while secondary accommodation will struggle to attract tenants.
Occupier demand for retail units is strong, but the delivery of around 100,000 sq m of new space to the market in 2011/12 will put pressure on retailers and shopping centres as competition intensifies. Requirements for large scale units are dominated by the major South African brands, while there is additional demand from fast food franchises both in Gaborone and around the country.
A lack of product, both to buy and lease, is frustrating both occupiers and investors. The principal locations in Gaborone remain in strong demand with a relatively diverse occupier base, whereas demand in most other towns is heavily driven by the fortunes of the local mines.
There is a shortage of available product at the top end of the market, with little being traded in Gaborone’s most exclusive neighbourhoods. Requirements for high-end rentals are also hard to satisfy both in the city centre and the best other areas which include the Phakalane Golf Estate. There are plans afoot, however, for a major expansion of the city with further development being proposed at Phakalane. However, it is not expected that this will affect values in Gaborone’s existing prime locations.