Know your building classifications
Category General News
Buildings are categorised differently depending on what sector of the market they are in, the size and age of the unit, their usage type, what features they have as well as where they are located. In this article, we will unpack the different types of building classifications for the industrial, office and retail sectors for the South African market.
It’s important to know what a building's classification is as it can affect what rentals are being charged within a specific area. It also gives you, the tenant, an indication of what specifications or what state the building is in before you shortlist them for viewings.
Building classifications for commercial properties
The most commonly accepted building classifications according to definitions as set out by Sapoa:
- P-grade (Prime grade): Top quality, modern space, generally, a pace-setter in establishing rentals and includes the latest or recent generation of building services, ample parking, a prestigious lobby finish and good views or a good environment.
- A-grade: These buildings are not older than 15 years and these buildings have had major renovations. They feature high quality modern finishes, air conditioning, adequate on-site parking, with market rentals near the top of the range in the metropolitan areas where they are located. (The following should also be taken into account in determining whether the building is A-grade or not: consider whether the building has a good quality lobby finish, quality access to/from an attractive street environment and other similar factors, such as safety and security).
- B-grade: Generally older buildings, but accommodation and finishes are close to modern standards as a result of refurbishments and renovation from time to time, air conditioned, on-site parking, unless special circumstances pertain.
- C-grade: Buildings with old style finishes, services and building systems. They may or may not be air-conditioned or have on-site parking.
Classifications for industrial properties
The most commonly accepted building classifications according to the definitions set out by the Investment Property Databank (IPD).
- High-tech industrial: Modern buildings with office components accounting for between 25% to 50% of the gross market rental.
- High grade industrial: Eaves height greater than 6 metres with good yard/circulation space.
- Light manufacturing: Office component accounts for less than 15% of market rental. Eave heights are less than 6m or limited yard / circulation space or restricted access.
- Warehousing: Eave heights are greater than 6 metres with good circulation, docking space and multiple access portals.
- Maxi-units: Modular units with a majority of rentable areas being greater than 1,000m² per unit.
- Midi-units: Modular units with a majority of rentable areas measuring between 500m² and 1,000m² per unit.
- Mini-units: Modular units with a majority of rentable areas being less than 500m² per unit.
Classifications for retail properties
The most commonly accepted building classifications according to definitions set out by the IPD:
• Super regional are buildings greater than 100,000 m²
• Regional buildings are between 50,000m² and 99,999m²
• Small regional between 25,000m² and 49,999m²
• Community centres are between 12,000m² and 24,999m²
• Retail value centre - Big box retailers, specialist retailers, home improvements, limited groceries (10,000m² to 45,000m²)
• Retail hyper centre - One hyper store (70% of GLA), convenience line stores, services
• Neighbourhood centres are between 5,000m² to 11,999m²
• Local convenience centres are between 1,000m² to 4,999m²
• Small freestanding centres are between 500m² to 999m²
• Standalone retail units - individual retail units not categorised elsewhere, these vary in sizes
• Specialist/lifestyle retail centre - Specialist traders/entertainment/theme centres
Knowing what type of building you are looking for can speed up the process of locating the perfect property for your business. Broll specialises in sourcing the perfect premises which meets your budget, location and specific tenant requirements. Contact a Broll Area Specialist today for further assistance!
Author: Broll Property Group