This has created opportunities and we have noticed many more buyers who have been waiting for this shift – from a sellers' market to a buyers' market.
Rentals in commercial office space are going to grow as building prices soar and vacancies are limited. The B and C grade industrial market has a long way to go to reach the highs of new development rentals. In the retail sector, the smaller neighbourhood retail centres will be least affected, as the lower rentals will be a lifeline in this tightening economy.
Mondeor Village shopping centre in the middle class southern suburbs of Johannesburg services the immediate community with good restaurants, a very popular video store, salon, bakery and a respectable outlet store. With over 2,000sq m of retail space fully let with committed tenants, a gross annual income of R1,65m rand per annum, lots of parking and good security. The actual gross income is R1,669,904 and the actual gross letting area is 2,041sq m.
August offers a broad range of opportunities, as there will be a number of properties on auction, ranging from retail centres, commercial buildings to residential blocks.
The first residential block is situated next to Leeways Nursery on Rifle Range Road in Haddon and consists of 31 flats. The majority of the flats are two bedrooms with 41 undercover bays and ample parking for visitors. The flats are fully occupied with no leases, but the tenants are paying a mere R1200/month.
Flats in the area that are sectionalised are being sold for around R450k per flat. The second property is located just off Klipriver Road near the Southdale Shopping centre comprising 80 two-bed and three 3-bed flats.
The demand for residential flat rentals in the southern suburbs is driven by the short supply of accommodation and the relatively cheap cost of living south of the Johannesburg CBD. Both properties are strategically located with access to schools, transport, shopping centres and a police station just a block away.
The opportunity is to upgrade these somewhat blocks and then to ask for a more realistic market related rental. Replacement costs will be no less than R16m to R35m respectively.
Expected prices to be achieved will be R10m and R17m.
For more information contact Norman Raad on 082 553 9597 or send an email.
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