As the energy crisis in the country incrementally worsens, the ramifications are considerable for property owners, who are having to resort to various options to limit the impact of prolonged periods of outages, future-proof their assets and ensure business continuity.

However, this is not enough to contain the fallout, and property owners are also calling for efforts to be bolstered, through other solutions, to resolve the energy challenges.

These are the key takeaways from industry organisation the South African Property Owners Association’s (Sapoa’s) Industry Survey for March, titled ‘Impact of Loadshedding on the Commercial Property Industry’.

Sapoa members have warned that unless loadshedding comes to an end, rentals will come under pressure, as tenants will not be able to consistently carry the burden of high diesel costs, which negatively affect property values.

They also pointed out that the cost of doing business was increasing with loadshedding.

Respondents to the survey operate primarily in the commercial office space, which comprised 64.71% of respondents. This is followed by industrial/logistics, shopping centres, residential and hotels, tourism and leisure.

The respondents stated that they had to deal with substantial periods of loadshedding over the past year, with 61.18% estimating that their organisation had been subjected to loadshedding daily in the past year. This was closely followed by 34.12% of respondents who had been subjected to loadshedding a few times a week.

The respondents’ businesses were adversely impacted on by loadshedding, with almost half, at 44.07%, saying loadshedding had a serious impact on their business.

Moreover, 28.81% noted a very serious impact, affecting business vitality and sustainability, closely followed by 25.42% of respondents experiencing a moderate impact. Only 1.69% were unaffected.

In cost terms, 55.36% of respondents estimated that monthly indirect costs incurred because of loadshedding, such as lost labour, productivity and resultant damage to machinery, ranged from R100 000 to R500 000. Moreover, 21.43% estimated this to be between R1-million and R5-million.

The highest impact on service delivery, as a result of loadshedding, was electrical damage to equipment, with 65.38% of respondents being affected.

This was closely followed by excessive capital expenditure on infrastructure to minimise the impact, with 63.46% of respondents experiencing this, while 26.92% of respondents noted an impact in terms of rental reversions.

The outlook for the future is also bleak, as 90.38% of respondents expect loadshedding to worsen.

Call for Action

In the survey, members proffered a myriad of suggestions that they believe would assist in alleviating the current loadshedding situation.

The suggestions included calls for government to appoint more engineers to address the situation, while Sapoa members also want local government to take action, where applicable, and to play a bigger role in terms of short-term solutions.

The need for better government decisions that acknowledge the severity of the situation was emphasised.

“Government must take ownership of the crisis and make a concerted effort to stamp out corruption,” a response to the survey states.

Further, it was averred that government and State-owned utility Eskom should focus on rectifying the underlying problems plaguing the entity, including corruption, crime, cartels, inefficiencies and ageing infrastructure.

Sapoa members would also like to see increased public pressure by local industry bodies on all three spheres of government to expeditiously resolve the power crisis.

From a legislative viewpoint, the complete separation of Eskom into generation, transmission and distribution entities, currently being undertaken, must be expedited, according to the survey.

Other recommendations entailed government’s introducing emergency energy power procurement and the opening up of wheeling frameworks for all municipalities.

The sur...