As many property owners and landlords continue to battle to retain tenants, some property experts say growth in the property market will come from smaller offices and sectional title offices.
According to Org Geldenhuys, managing director of Abacus Divisions, the growth in the property market is going to come from smaller offices and sectional title offices, with purchase figures of around R1.5 million to R2 million.
According to Org Geldenhuys, managing director of Abacus Divisions, the growth in the property market is going to come from smaller offices and sectional title offices, with purchase figures of around R1.5 million to R2 million.
He explains that this domain is the domain of the owner/occupier who, until very recently had been sitting on his or her money.
Property buyers and prices
“Current signs are that there is a flicker of an uptick in the commercial property sector, with this charge being lead by owner occupiers looking at small office space deals,” he says.
Geldenhuys says deals are in the region of between R1.5 million to R2 million with offices measuring from 120 to 200 square metres.
Following the sale of the recently launched boutique office Park in Irene, called Quattro Fontane, they are seeing increased enquiries for smaller office space and sectional titles, he says.
Meanwhile, Grant Williams, chief executive officer of Ash Brook, says they see demand for the sectional title/small office space sector ranging from R1 million to R10 million and measuring from 100 to 500 square metres, and are not as prevalent as offices to rent.
“Low interest rates combined with increasing rentals (due largely to increasing operating costs) are driving buying demand for sectional title offices,” says Williams.
Buyers are generally owner/occupiers of small to medium businesses, notes Williams.
These companies have usually been established for a number of years and have previously rented their premises for at least 3 to 5 years, and are now ready to take the next step in their business's growth plan and invest in their business premises.
“It is useful to note here that banks are more willing to provide property finance to companies who are occupying their own premises, rather than a simple investment property,” he says.
When searching for an office space to buy, one should remember to speak to a qualified agent who deals in commercial sales only, he says.
Locations and rentals
Williams points out that areas of high demand in Johannesburg include Bryanston, Sandton, Rivonia and Sunninghill and in Cape Town, The Waterfront and Century City still dominate the arena, while in Pretoria, Hatfield, Menlyn and Brooklyn remain areas of high demand.
He says on the rental side, rates fluctuate dramatically with price ranges from R65 to R210 per square metre dependent on area and condition of the building.
Purchase prices range between R10 000 and R45 000 per square metre, he says.
Geldenhuys says owner/occupiers are coming out of hibernation and this is where the market rebirth will come from and these buyers are looking to invest their own cash that they have been sitting on during the recession and the slump in the local property market. – Denise Mhlanga
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