Traffic congestion turns Pretoria properties into offices
Although commercial building east of Pretoria continues, resistance to traffic congestion, long commutes and high office rentals is driving a preference for repurposed properties in the city's residential heartland.
That is according to Rob Ketjen, chairman of Harcourts SA, who says rezoned office space in traditionally residential suburbs such as Brooklyn, Hatfield, Hillcrest, Hazelwood, and parts of New Muckleneuk and Arcadia has become a popular niche market investment vehicle.
"There is ongoing demand from the legal and medical fraternities as well as entrepreneurs wanting convenient, upmarket yet affordable offices close to their homes," he says. "This is ensuring strong buying and rental take-up of quality single and multiple home conversions."
Ketjen says the Pretoria Municipality is disposed towards granting business rights to homes in areas where traffic volumes are high, and those on busy corners. Such properties are selling for up to R3.5 million, depending on location, before additional money is spent on converting them into offices. The quality of the conversion will then dictate the rental, which can be as high as R95/m² a month. Particularly sought after in this category, Ketjen says, is office space ranging in size from 200m² to 500m², and in price from R65/m² to R85/m².
Commercial property specialist Dennis Hamer, of Harcourts Pretor in Pretoria, says new building activity is a strong indicator that the country is emerging from the recessionary conditions of the past few years.
"The local commercial sector has experienced positive growth during the first six months of the year, particularly in areas such as Menlyn, where prime new office space, at a cost of up to R140/m² a month is enjoying steady takeup by large corporates and head offices. Although there is an oversupply of office space in certain areas in Centurion, it is encouraging to see increasing demand in other locations, particularly those conveniently close to the Gautrain."
Accompanying the unflagging construction of office buildings in the east is a parallel trend for residential development, says Hamer. This was supportive of demand by office park employees wanting to live closer to their places of work.
"Traffic is playing a major role in driving outbound movement from the city, as a result of which areas such as Faerie Glen, Mooikloof and Equestria, which until recently was an agricultural suburb called Willows, are now home to largescale, high-security new residential development.
"With commercial development on the cards, we expect residential building activity to start gaining momentum again."
According to Irene Prinsloo, residential specialist at Harcourts Pretor, there is a high demand among young professionals and investors for townhouses in the "modern" suburbs flanking the Menlyn business hub.
Particularly sought after are freestanding townhouses costing between R550 000 and R1m. Stack units, from R460 000, are also moving well.
Commenting on the high number of commercial vacancies in Europe at the moment, as well as those in certain parts of Pretoria, Ketjen says SA investors need to focus on buying the right properties in the right places to reduce the risk of becoming casualties in the event of any oversupply.
Weekend Argus (Sunday Edition)
Posted at 08:06AM Sep 24, 2012 by Editor in Commercial |