WORDS: DEBBIE HATHWAY :: PHOTOS: SUPPLIED
Neil Bernberg, MD of Port Commercial Properties, talks about the shift towards office space ownership to drive immediate returns and future viability.
Recognising the growing emphasis on short-term gains and long-term sustainability in business decisions, entrepreneurs increasingly acknowledge the economic and tactical merits of possessing their office space. Embracing ownership, as exemplified by The Pinnacle (a component of the Investicore assortment) in Cape Town’s City Bowl, extends beyond the mere reduction of monthly expenditures, offering an array of advantages that foster financial prospects and holistic triumph.
Neil Bernberg, MD of Port Commercial Properties, says it makes financial sense. “The concept of sectional title office property is one way to own office space. By purchasing your office space, you are building equity, which could be an opportunity to invest in your retirement as a business owner. Unlike renting, where your monthly payment is essentially an expense, owning property allows you to allocate your funds towards an asset that will appreciate over time. The value of your investment will likely increase, providing a financial cushion for your future.”
ENSURING COST CONSISTENCY
Unlike rental expenses susceptible to increases, acquiring office space guarantees a steady monthly payment. Concerning interest rates, the question arises – how can you maintain stability? The propensity for landlords to incrementally elevate rental charges underscores the value of office space ownership in bestowing strength and authoritative influence over your business setting.
“Traditionally skyscrapers are owned by listed funds and investors. The sale of floors at The Pinnacle allows individual investors and owner-occupiers to partake in this typically exclusive market. The Pinnacle also offers a unique opportunity for potential income generation. With large floor plates ranging from 400m² to 800m², you can subdivide and rent out any unused space. This additional income stream can further contribute to the growth and success of your business,” says Bernberg.
MAXIMISING TAX BENEFITS
You can claim an income tax deduction on your monthly bond interest payments. While renting entails claiming the entire monthly rental amount, there’s an interesting comparison to be made. In the rental scenario, the total rent could seem more considerable than the interest part of your bond. However, the advantage of owning an office space becomes evident as you can customise it to your specific needs, often yielding better value for the same or even less floor area than a rental property.
Furthermore, when you invest in improvements for your owned property, like designing custom meeting rooms, call pods, and recreational and work areas, these enhancements can be capitalised upon. This translates into an additional annual deduction of 5% of the value of the improvements, which can also potentially lead to reduced taxes upon selling, depending on how much has been claimed previously.
On the contrary, when you rent, even if your landlord allows construction as part of the lease agreement, claiming tax benefits for these improvements gets more intricate. Such enhancements fall under the “leasehold improvements”, a more complex aspect of tax law.
CAPITAL APPRECIATION
As more businesses and professionals migrate to Cape Town, a trend set to continue for the foreseeable future, demand for office space is increasing, meaning that the capital appreciation of your asset is assured. Savvy executives looking for an elite property in the heart of the City Bowl would be hard-pressed to find something better than The Pinnacle. It is centrally located, with the additional benefit of being on the hospital grid, which means an uninterrupted power supply during load-shedding. “With no load-shedding, your business can operate seamlessly without the disruptions faced by many others who are grappling with the staggering costs associated with keeping their business operational during the daily planned power shutdowns. This reliability is crucial for maintaining productivity and client satisfaction – and can also positively impact staff morale,” says Bernberg.
EMPOWERING CUSTOMISATION
The Pinnacle’s proximity to critical institutions such as the Courts, the Masters’ Office, and the Deeds Office provides unparalleled convenience, streamlines administrative processes and saves valuable time for legal practices. The location is further enhanced by its accessibility to Cape Town station (a four-minute walk away) and the nearest myCiti Bus stop (a six-minute walk away), for business with call centre staff, for example, who rely on efficient transportation to get to work.
The Pinnacle also offers on-site storage space that can be purchased, enabling the storage of essential business items without needing external solutions.
The Pinnacle prioritises security and access control, providing your business with a safe and protected environment 24/7.
Embracing office ownership at The Pinnacle allows you the freedom and flexibility to tailor the space to align seamlessly with your brand and identity. This transformative opportunity elevates your company’s image and fosters a profound sense of ownership and pride among employees. Working within an environment that embodies the company’s culture can enhance engagement and productivity.
