24 Jul 2013
A tentative resurgence in property confidence that became evident at the end of last year in Pretoria East has gained velocity this year in the commercial and residential sectors.
Dennis Hamer, owner of top local agency Harcourts Capital, says that two factors are in play in the residential sector. “Banks are once again willing to fund new residential development and that enables developers needing finance to dust off development plans that were shelved because of the recession." Secondly, developers with their own resources are re-entering the market thanks to the message of confidence being sent out by lending institutions, he says.
His franchise is marketing four boutique residential developments, the first being in Lynnwood Manor and offering a total of 10 sectional title units, six of which are available at prices of between R1.4 million and R1.9 million. Units are between 90 square metres and 120 square metres.
Nine full title homes of around 300 square metres each are on offer in another exclusive development in Lynnwood Glen at prices of around R2 million, he adds. In Val de Grace, Harcourts Capital is marketing an apartment development of 50 one and two bedroom apartments ranging from 62 square metres to 84 square metres each in size and priced at under R700 000.
Another large development currently planned for Faerie Glen will offer 62 units. The site has been secured and building plans are being finalised. Hamer says prices and sizes will be available shortly.
Meanwhile, the renewed market confidence is evident in the commercial sector. Older office blocks in Pretoria East are being targeted by buyers who are switching from renting office space to owning their own buildings, he says.
The development of new commercial space in the past few years has opened the market to smaller investors who have made their calculations and prefer to invest in their own office space. Rentals have escalated on the back of new developments and for smaller investors ownership now makes sound financial sense. Hamer says the fact that buyers are willing to make long-term investments in property is a vote of confidence in the local market as well as their economic prospects.
Hamer says his office has sold two office blocks in the past two months and several clients are scouting for suitable investments. He says office blocks that have high vacancies are suitable for owner occupation purchase opportunities. "Leases of existing tenants are taken over and unoccupied space is typically taken up by the new owner." Buyers include professional firms such as attorneys, architects and embassies.
"Another interesting trend is that new owners often attract tenants in related disciplines, which leads to clusters of expertise such as, for instance, architects, town planners and quantity surveyors all in one location," he says.
Space in Pretoria East’s modern office parks is currently leasing at between R120 and R140/square metre, while offices in older blocks are leased at around R80 to R100/square metre, and listed property funds are showing confidence in the area, where Emira Property Fund has developed the Podium Office Park of 15 000 square metres and is finalising a 10 000 square metre extension, Hamer says.
He says while Sun International has applied to have its casino licence for the Marula Sun transferred to a site in Menlyn Maine, the Atterbury Fund is already developing three office buildings on the vacant site to the north of its Lynnwood Bridge development, and Growthpoint completed the FNB consolidated park in Menlyn.
Hamer says the marked growth in new office space in Menlyn can be expected to boost demand for residential property, since higher fuel prices and the pending implementation of the Gauteng road tolls will undoubtedly prompt buyers to seek homes closer to their workplaces.
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