Four-star GBCSA rating now a prerequisite for Rode’s Report Grade A+ rating
Readers of the coming Rode’s Report may notice that the publication no longer includes “location” as a determinant of grading.
Erwin Rode, publisher of the quarterly Rode’s Report on the SA Property Market explains: “In contrast to the South African Property Owners Association (SAPOA), our report now defines office-building grading only in terms of quality of finishes and facilities, and not in terms of where the building is situated.
“Obviously, location plays an important role in determining market rental rates overall, which is why we report on these rates in the Rode’s Report by node (and grade), but our point of departure is that grading itself should only relate to the standard at which an office building has been kitted out.”
In terms of a building now being classified as a Grade A+ in the Rode’s Report, a minimum 4-star rating by the Green Building Council of South Africa (GBCSA) is a prerequisite.
Gradings according to the Rode Report are now classified as follows:
- Grade A+: Generally new, top-quality, modern buildings; ample parking; a pace-setter in establishing rentals, a prestigious lobby finish. A minimum 4-star rating by GBCSA is a prerequisite.
- Grade A: Generally not older than 10 years, unless renovated; high-quality finishes; adequate on-site parking; air-conditioning.
- Grade B: Generally 10 to 20 years old, unless renovated; accommodation to modern standards; air-conditioning; on-site parking.
- Grade C: Generally 20 to 30 years old, unless renovated; in fairly good condition, although finishes are not up to modern standards; may have on-site parking; unlikely to be centrally air-conditioned.
- Grade D: A building reaching the end of its functional life but can be used for storage; old and in poor condition; near the bottom of the rental rate range; typically no air-conditioning and no on-site parking; may have good location.
These grades might be further sub-divided into sub-grades, viz. A-, B+, B-, C+ or C- for purposes of fine-tuning market rental rates.
In every issue of Rode’s Report (RR), we reflect rentals for the following sub-grades:
A+ Reported in RR tables
A Reported in RR tables
B Reported in RR tables
C Reported in RR tables
Sub-grades not reported on, can be established by straight-line interpolation. This schema has been appearing in Rode’s Report since 1995. At a later stage, SAPOA (following the Australian example) changed the name of grade A+ to P grade (for ‘premium’). As the reader will see, the P-name does not fit in with the above schema, and for this reason, the Rode’s Report did not follow the Sapoa nomenclature.
Analyses and reports on most sectors of the property market in the major, and some secondary, cities in South Africa. It covers, inter alia, trends and levels of rentals and standard capitalization rates by property type, grade, node/township, the listed real estate market, and building construction costs and building activity.
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