Gauteng’s office property market continues to expand with new developments taking shape in some of the most sought-after locations in Johannesburg.
Illovo Edge is a new development at the northern end of Fricker Road and the corner of Harries Road in Illovo, Johannesburg.
Broll Property Group reports an increase in demand for office space in Illovo, the prestigious mixed-use node between Rosebank and Sandton.
Jane Parker, Broll commercial broker says Illovo Boulevard consists of high quality offices with tenants including the likes of Webber Wentzel, Impala Platinum, JP Morgan, Brait and Ethos.
“There is land available for development along Melville Road and the extension of Fricker Road towards the Illovo Point,” she says.
She explains that Illovo Boulevard is a well managed precinct with its own infrastructure and good security.
Comprised mainly of A-grade office space, it is characterised by street-style coffee shops and Illovo’s Oxford Road is a mixed-use node with high quality retail and ribbon office developments.
The Gautrain bus stop in Fricker Road gives easy access to high quality public transport.
Rentals in Illovo increased steadily until the first quarter of 2008, when they levelled off at R130 per square metre. In Q3 2009, rentals dipped slightly to R125 per square metre and have been held steady since, she says.
Vacancies showed a sharp drop from a 15 percent high in the Q2 2003 to 4 percent in the Q1 2004.
The general trend was then downward until the Q2 2008, when vacancies increased to 5 percent. In the last three years, vacancies have dropped to 2 percent.
“Demand is good, with larger tenants on Fricker Road, while the Oxford Road strip accommodates the smaller occupiers, on leases of three to five years.”
Meanwhile, the ever changing Sandton skyline is in for a new addition as construction works begin on the new R650 million Katherine & West Roads office development.
Katherine & West in the Sandton Precinct in Sandton will comprise eight storeys of offices with a strikingly contemporary architectural ‘look-and-feel’ that will enhance the Sandton skyline.
Developed by Barrow Properties, the property is located opposite the Sandton Gautrain station and next to the new Radisson Gautrain and will have 19 000 square metres of office space.
It will take 26 months to complete and its striking façade, reminiscent of ocean waves will create a new global landmark in what’s regarded as “the CBD of Africa".
Barrow Properties reports a considerable interest in the AAA grade offices and the seven luxury rooftop penthouses with 40 percent of the sectional title space already pre-sold.
Paul Barrow, a director at Barrow Properties says the early success of the development underlines Barrow’s view that, notwithstanding the challenging business environment of the moment, there is still a distinct market for well conceived, well located, up-market office space.
“There are very few AAA grade office space of this nature available in Sandton right now and certainly nothing of a sectional title type,” says Barrow.
Some 45 sections of AAA grade office space are being sold ranging from 120 square metres to 1000 square metres at R23 900 per square metres, plus basement parking, storerooms and balconies. An entry level price for this piece of Sandton skyline is R3.9 million.
Barrow says major buyers have the option of acquiring entire floors of just over 2 000 square metres a piece. There will be six levels of parking providing a parking ratio of four bays per 100 square metre of office space.
“Interest has come from investors and owner occupiers.”
The smaller units are particularly in demand and early buyers will have a better choice of units and the benefit of current pricing.
Barrow says they anticipate further interest from syndicates, high net worth individuals and overseas buyers such as multinationals with a South African presence.
On the other side of Sandton, tenants at the new Cosmo Business Park cite accessibility and proximity to Lanseria International Airport as key advantages at Investec Property’s newest industrial and warehousing development.
The 40 hectare Cosmo Business Park, centrally located on Malibongwe Drive just 2 km north of the established Kya Sands commercial and industrial node, offers exceptional access to Johannesburg, especially the city’s northern suburbs, Pretoria and the West Rand.
"We opted to be in Cosmo Business Park because of favourable rental and the financial viability the move represented for our company," says Shawn Landman, chief executive officer of Scientific Group.
The company occupies 5 700 square metres of office space. The Courier Guy, a tenant that moved into Cosmo Business Park in March says they were attracted by guaranteed electricity supply and competitive land prices.
Offices at Cosmo Business Park in Cosmo City, Johannesburg.
Other tenants opted to purchase land and then designed and built their own new premises.
Mike Brown form Investec Property says of the total 72 stands available, several have already been sold. Cosmo Business Park is able to accommodate demand for fully serviced land from 1 600 square metres to 8 hectares. - Denise Mhlanga
Readers' Comments Have a comment about this article? Email us now.
Print
