30 Sep 2007 - Dakar Offices

Here is an example property snapshot for this quarter:

DAKAR OFFICE REAL ESTATE SNAPSHOT FOR Q3 2007

OVERVIEW

The main office locations in Dakar are Downtown (Plateau) to the south, Point E just to the north of Downtown and Les Almadies/Ngor in the north.

Downtown is the location of most of the State's Ministries, many of the Embassies, Senegal's utility companies, and the national and regional banks. It is highly congested, densely developed and dirty.

Point E is essentially a spill-over location from Downtown and many professional services companies are located here.

Les Almadies/Ngor is an increasingly popular location particularly with western corporates.

In terms of product there are office buildings, particularly in the Downtown and Point E areas. However, many businesses choose to operate out of villa and apartment buildings.

Demand is reasonable but not particularly strong in terms of international corporates.

In terms of costs, a high quality apartment (3-4 beds) in all locations is generally in the range of CFA 950,000-1,500,000, and a villa (5 beds+) in the range of CFA 1,500,000-3,000,000. There are, to all intents and purposes, no "pure" office buildings in Les Almadies/Ngor. However, prime office buildings in Downtown/Point E are generally in the order of CFA 8,000-10,000 per sq m per month.

OUTLOOK

There is a reasonable amount of residential development taking place, but less in terms of offices. There is reasonable corporate interest, and we would expect rents to rise. If proper office buildings were to be developed in the area of Les Almadies/Ngor we would expect these to let particularly well.

PRACTICES

Standard Leasing Terms

Length: 1-5 years is typical, renewable.

Exit options: By negotiation on longer term leases.

Rent currency: CFA.

VAT: Yes - 18%.

Payment: Monthly or quarterly in advance.

Indexation: On short-term leases it is common that there is no indexation. For longer term contracts 5%-8%.

Rent deposit: 1-3 months' rent is common - held by the Landlord for the term of the contract and returned at Lease end without interest.

Taxes: 3.6% TOM (waste tax).

Statutory renewal right: There may be a Lease provision allowing for the contract to be renewable, either on terms to be agreed at the time or according to a formula.

Landlord's responsibilities: Maintenance and structural repairs paid by Landlord. Maintenance of common parts paid by Landlord, but may be recovered from the Tenant.

Tenant's responsibilities: Tenant's responsibility in terms of day-to-day maintenance.

Reinstatement: Tenant delivers back to the Landlord in the state of the premises at the commencement of the contract, fair wear and tear excepted.

Subleasing: Generally no rights - may be possible to negotiate.

Surface area measurement: sq m to include some of the common areas.

 

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