PROPERTY: Sandton CBD Poised for Growth, Says JHI
Recent Gauteng Business News
Characterised by a large number of owner occupied developments and with the majority of international banks, the JSE Securities Exchange, legal and management consultancies, Sandton is widely acknowledged as the premier financial district in South Africa.
Elaborates David Reid, investment broker for JHI: “Although Sandton CBD is relatively modern, there is a category of buildings which, being 20-30 years old, is now considered obsolete. What today’s office market requires and demands are buildings with wide floor plans of 2000 square metres and more, with minimum wing widths of 16m and modern architecture, infrastructure, fixtures, and fittings which reflect the contemporary designs and needs of today’s hi-tech world. In addition, there is growing interest in buildings with energy conserving or ‘green’ features, particularly with rising electricity and water costs,” says Reid.
“As a result, there is considerable potential for iconic architecture to be developed in this node, particularly when you take into consideration the fact that most of those obsolete buildings cannot be rebuilt piecemeal due to the major disruption for existing tenants. In most cases such buildings can be demolished altogether and redeveloped into a more appealing mixed use development with ground floor retail and offices of approximately six floors above.
“While we have seen successful redevelopment of some former commercial buildings into upmarket residential apartments, the slowdown in the residential property market impacted negatively on some of these. However, as the economy improves – underpinned by increasing consumer demand and thereby creating an underlying tenant demand, it is anticipated that we will start to see a trend more towards manageable mixed use developments as outlined above, resulting in a higher concentration of offices,” he says.
Transport is key factor impacting on future development, and with the high cost of transport including proposed high toll fees in Gauteng, it is likely that businesses – particularly those with staff living nearby – will look to relocate to the Sandton CBD. Sandton is already home to the biggest Gautrain station and implementation of the Bus Rapid Transport system (scheduled for completion in 2013) will improve public transport facilities and increase the accessibility of the node.
SAPOA reports that there is currently some 199 784sqm of committed new developments in the Sandton business district, of which approximately 48 percent is speculative development, which may lead to an increase in vacancies in the short to medium term. Some developments currently under construction or in the pipeline include: 20 000sqm of sectional title office space on the corner of Katherine and West Streets – for occupation in 2013; 30 000sqm at 114 West St, being new headquarters for Alexander Forbes; 6 Sandown Valley Crescent, with a gross lettable area of 18 000sqm and a projected completion date of mid-2011; 16 000sqm at 1 Protea Place, with Cliffe Dekker Hofmeyr Attorneys as a tenant and other smaller tenants; and Sandhurst Office Park, where 26 000sqm of office space becomes available in 2013.
A key driver of Sandton’s commercial property market at present are tenants linked in some way or other to the financial services market, with the most sought after area being within or on the periphery of a triangle between Rivonia Road to the east, Grayston Drive to the west and West Street to the south. The most deciding factors for the future are proximity to the JSE and Gautrain, coupled with the physical attributes of buildings such as those with large floor plates, adaption to electronic communication, accessibility and parking.
Within the next five years the following developments are expected to commence: 9 000sqm at 140 West Street; 35 000sqm for Standard Bank at 11 Alice Lane; 150 000sqm on the site of the old Sandton municipal offices; 60 000sqm for Old Mutual on the corner of West, Stella and Rivonia Roads; Village Walk rebuild of approximately 150 000sqm on the corner of Rivonia Road and Maude Street; and at FNB Towers, 25 000sqm of additional bulk.
Currently in the Sandton business district JHI are marketing available office space to purchase and to lease, ranging from 250 to 4 500 square metres and in some instances even up to 26 000 square metres.
Business News Sector Tags: Property| Business|