Working with an industrial property broker for your property matters in South Africa is unquestionably a wise choice. One could be losing hundreds of thousands of Rands or more without one.
Not every broker is created equal.
In addition, the barrier of entry in securing a registration with the PPRA (Property Practitioners Regulatory Authority) is far less stringent than that of becoming a hairdresser or a beautician. So it’s fair to say that while hiring a broker should save you or make you far more money than their associated fee, it could cost you far more than you bargained for if you align with 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 companies frequently offer individualised attention, in-depth local market expertise, and a desire to negotiate the best price for their customers.
The point is that there are great brokers everywhere. Sometimes, the “safe choice” is not the best choice. Select the broker, not the brokerage firm.
Ignoring Broker Experience
The value of experience is in its duration as much as its content. An experienced broker has dealt with market downturns, handled challenging transactions, and has a wealth of knowledge unmatched by those simply reading market reports.
Particularly in today’s marketplace, industrial property brokers who have experienced market downturns will better understand how to navigate today’s 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 between a decent and a terrific offer.
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. Looking past the marketing spin and evaluating their track record, client references, and strategy for meeting your particular objectives is critical.
With social media exploding, more brokers are taking to Twitter, LinkedIn, Instagram, TikTok, and Facebook to promote themselves and share valuable information. However, simply having “followers” does not make them beneficial. especially if most of their followers are other brokers. Yes, some of the best brokers worldwide have significant social media followings, and some of the least capable are.
Choosing a broker that is well-represented on one of the 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 are initiated through solid relationships. Also, the local property portals generally showcase old adverts for properties that are not up-to-date. The portals are also a repository for young, inexperienced brokers, as this is the easiest way for them to get to the marketplace. The right broker to choose is the one with good relationships in their particular niche.
Focusing on the Brokerage Fee vs the Results
While understanding the commission structure is essential, it shouldn’t be the only criterion used to make a decision. It shouldn’t be a consideration at all.
The better brokers will save or earn their fees and more. The best brokers will save you or earn you 10x to 100x their fee.
Several investors and tenants either refuse to work with a broker or demand a lower commission to see them lease a building or space for 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.