Madison establishes new commercial property leasing business

Madison Leasing, a division of South Africa’s first JSE-listed property asset managers Madison Property Fund Managers, has been mandated to assist in leasing vacancies in the property portfolios of leading JSE-listed property loan stocks ApexHi Properties Limited and Redefine Income Fund.

Together these companies own a substantial R11 billion worth of South African property, offering some 3,3 million square meters of gross lettable area across an impressive total of 541 properties. The property portfolios span the retail, industrial and office sectors located nationwide, including such landmark properties as 90 Rivonia Road in Sandton, ABSA Park Ridge in Gauteng, South Coast Mall in KwaZulu-Natal, all in the Redefine Portfolio. In the ApexHi Portfolio well-known properties include 222 Smit Street in Braamfontein, 320 West Street in Durban and Nedbank Centre in Smith Street Durban.

Madison is already well established in the property sector and is recognised for its innovation and deal making. Madison Leasing combines these skills with those of the former Spearhead Properties Group leasing team.

Madison’s leasing director Darren Wilder is confident that, even with the substantial size of this portfolio, Madison will deliver leasing that is proactive, dynamic and, above all, effective.

“Initially Madison Leasing will be focused on the office and industrial space within the portfolios, however we are excited about the prospect of retail leasing,” says Wilder.

Currently there is some 280,000m2 of space – equating to 8,5% of the combined portfolios – available to let. Wilder explains that Madison Leasing has targeted a decrease of 10% to 15% in the combined vacancy level before the end of the year.

“We have assessed opportunities within the portfolios and ApexHi’s properties currently provide numerous prospects. Redefine’s portfolio, with its vacancy level of only about 5%, offers far fewer opportunities however these certainly provide the possibility for rental growth,” says Wilder.

Wilder points out that an exciting aspect of the year to come is the tenanting of new developments which Redefine is bringing to the market such as Convention Tower in Cape Town, which is already 80% let.

“Some 25,000m2 of new office and industrial space will come onto the market between now and mid-2008,” says Wilder.

He notes that in Cape Town rentals are being achieved as high as R120/m2 for offices and between R40/m2 and R45/m2 for industrial space.  In Johannesburg these figures are R100m2 for offices and R25/m2 to R35/m2 for industrial premises and in Durban office rentals are being achieved at R80/m2 and industrial property rentals at R25/m2. “Rentals are increasing at a very satisfactory rate,” says Wilder.

Madison Leasing has its own team of internal brokers in addition to the numerous external brokers who contribute to the leasing of the portfolios.

“Relationships with our external brokers are a priority for Madison Leasing and providing them with both the information and services that brokers require is essential to our core function,” points out Wilder.

Madison has specially appointed leasing consultants, providing a one-stop shop, to fulfil this task. Services include a 48-hour turnaround time for answering queries, finalising deals and paying broker commissions after the signing of deals. In addition Madison Leasing provides a free design service for tenant layouts and comprehensive supervision of installations.