Station property popular

2 Jul 2010

"We're seeing a surge in interest and enquiries from both local and international corporate tenants wishing to relocate to the CBD of Sandton and Rosebank - with a prerequisite of being in close proximity to the Gautrain stations, followed by a preference for 'green' buildings," says Lia Pauley, leasing and sales broker for property services company JHI.

"Such enquiries reveal that these prospective tenants have thoroughly researched the market and the location. They know that by being in the hub of either Sandton or Rosebank, they are also within easy reach of hotels, shops and residences. In addition, the shift in tenants and corporate seeking 'green buildings' reflects a growing awareness of the Green Council ratings and a desire to benefit, in the long term, from realistic rentals and reduced service charges.

"This growing trend towards a demand for space near the Gautrain stations will have a marked, positive impact on nearby office and industrial areas that meet these criteria as business, tourism and other commuters begin taking advantage of this convenient new transport facility."

Economic benefits

It is anticipated in that existing and possible new retail developments near the Gautrain stations are likely to enjoy increased trade as commuters have the convenience of being able to purchase goods en route to their destinations.

Further economic sense to utilise the new transport system are the proposed new tolls, which seem set to be imposed on commuters. For commercial tenants this is coupled with a potential saving on high parking rental charges, which are in the region of R500-R685 per basement bay per month in Sandton and R500-R785 in Rosebank CBD. In addition, the convenience factor is considerable, given that bumper-to-bumper traffic on the highways is a regular occurrence.

Redevelopments surge

Pauley says another interesting trend is the redevelopment of existing buildings due to higher bulk being granted by the council to property owners who own buildings in close proximity to the Gautrain stations in Sandton and Rosebank. This will further boost the commercial property market in these nodes.

In Sandton currently the demand is mainly in the rental market, with gross rentals, which include operating costs, rates and taxes, somewhere between R120 and R171 per square metre for A grade space and approximately R80-R100 for B grade premises. However, investors are also showing an appetite for the acquisition of land or buildings for redevelopment - again close to the Gautrain station.

"Sandton remains the financial hub of Johannesburg and still has room for development, particularly in the sectional title office unit sector as well as smaller office blocks where owner-occupiers can reflect their own identity."