Land shortage boosts PE commercial

Commercial and industrial property can be lucrative investments, offering investors a variety of opportunities to accumulate wealth. Commercial and industrial expert Warren Jack of the Warren Jack Property Group, a commercial brokerage firm, believes Port Elizabeth in the Eastern Cape is an undiscovered gem.

"No one will ever again be able to accuse the Friendly City of not being a trendsetter – especially with its recent record in the property market. Five years ago, PE was the first place in the country to show evidence of a boom in the residential sector and, lately, the commercial market has been following suit.

"Up until last year, rental in the industrial market had grown by 150 percent over the preceding five years, giving investors exceptional return on investment.

"Due to this tremendous growth-rate, rentals, which were lagging behind that of the bigger centres, have now caught up on the warehousing side as well as on land casts. In fact, in warehousing our former Cinderella city is now achieving some of the highest rates in the country.

"I believe the buoyant market in the Eastern Cape can be attributed to a large degree to the dual influences of the Coega deepwater harbour development and one of the pillars of the local economy, the automotive industry. With these driving elements part of the immediate future, I'm convinced that the growth in the Eastern Cape property market is set to continue for at least another decade.

"It seems I'm not the only one with this mindset as investors from all over the country are scrambling to get a piece of the action. Fact is, time is running out and so is the land.

"Commercial land is becoming a scarce commodity in PE and investors are prepared to pay almost anything for their slice of the cake, driving prices, so to speak, through the roof. Rates as high as R1 200 per square metre for industrial land and R2 500 per square metre for retail land are being achieved and, as they say, the proof of the pudding is in the eating.

"Due to its geographical location, the city can only expand to the west and so it doesn't take a genius to recognise that the Greenbushes area is set for a bloom period in this sector. Two years ago, land here was selling for R75 per square metre and now it's nudging the R500 mark.

"For many years, the tenant was king, but now the market favours the landlord as the demand for space and the lack of land are forming a lethal combination for growth in both the rental and sales markets.

"As far as the retail market is concerned, I believe PE is nearing saturation point. Several new developments have recently been completed or are underway. However, as the city expands to the west, new retail centres are sure to be one of the by-products.

"Although the commercial property market is feeling the pinch of the interest rate hikes on a national scale, the beauty of this sector is that one can check the numbers before investing."

For more information send an email or visit www.warrenjack.co.za.

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