Working with an industrial property broker for your property matters in South Africa is unquestionably a wise choice. Without one, you could lose hundreds of thousands of Rands or more.
Not every broker is created equal.
In addition, the barrier to entry for securing registration with the PPRA (Property Practitioners Regulatory Authority) is far less stringent than becoming a hairdresser or beautician. So it’s fair to say that while hiring a broker should save you money or make you far more money than their fee, it could cost you far more than you bargained for if you choose the wrong one.
Picking the Brokerage Firm over the Broker
While large brokerage companies have advantages, the broker acting on your behalf cannot always be relied upon to provide the best service or pay close attention to your unique requirements. Smaller boutique firms often offer individualised attention, deep local market expertise, and a strong drive to negotiate the best price for their clients.
The point is that great brokers exist everywhere. Sometimes, the “safe choice” is not the best. Select the broker, not the brokerage firm.
Ignoring Broker Experience
Experience matters as much for its duration as for its content. An experienced broker has navigated market downturns, handled challenging transactions, and possesses a wealth of knowledge unmatched by those who simply read market reports.
In today’s marketplace, industrial property brokers with experience through market downturns are better equipped to navigate current challenges.
Ignoring Specialisation
Industrial property is a broad industry, with specialities ranging from large modern Distribution Centres to smaller multi-tenanted Industrial Parks. Verify that your broker has experience with the particular property or transaction you are dealing with. Their in-depth expertise may distinguish a decent offer from a terrific one.
Generalists are not the answer. If an individual broker says they can help you with every need for sales, leasing, finance, and management, find another broker. Your property decisions will be one of the most financially important decisions you will make. Work with someone with relevant experience with the same asset type you are leasing, selling, buying, or financing.
Believing that well-known brokers are the best brokers
Popularity is not necessarily a good indicator of talent. Due to strong marketing, a broker may be well-known, but that doesn’t necessarily mean they are the ideal choice for your needs. Look past the marketing spin and evaluate their track record, client references, and strategy for meeting your specific objectives.
With social media exploding, more brokers are taking to Twitter, LinkedIn, Instagram, TikTok, and Facebook to promote themselves and share valuable information. However, having “followers” alone doesn’t make them beneficial. Especially if most of their followers are other brokers. Yes, some of the best brokers worldwide have significant social media followings, while some of the least capable do not.
Choose a broker that is well represented on local portals.
Local property portals are not the only places people visit for commercial and industrial property. Most commercial and industrial property transactions in South Africa start with strong relationships. Local property portals also often display outdated property advertisements. The portals also serve as a repository for young, inexperienced brokers, as they’re the easiest way to enter the marketplace. The right broker has strong relationships in their niche.
Focusing on the Brokerage Fee vs the Results
While understanding the commission structure is essential, it shouldn’t be the only factor in your decision. It shouldn’t be the only consideration.
Better brokers will save you or earn you more than their fees. The best brokers will save you or earn you 10 to 100 times their fee.
Several investors and tenants either refuse to work with a broker or demand a lower commission, only to have them lease a building or space on far worse-than-market terms, or sell a property and leave hundreds of thousands of Rands on the table.
Conclusion
It is unquestionably wise to work with an industrial property broker in South Africa. The right broker can make all the difference in your experience and financial results when leasing, selling, or financing an industrial (or commercial) property.