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On-going upswing in demand makes Tshwane commercial property a sound proposition

All the current indicators point to sales and prices of commercial and industrial property in the Tshwane/Pretoria area showing a remarkable upswing in the year ahead. This was said recently by Nick Breytenbach, franchisee for Rawson Commercial in Tshwane.

Breytenbach who has run this Rawson Commercial franchise (the first such Rawson Property Group franchise in the area) since November 2011, is a qualified attorney and conveyancer who ran his own legal practice, specializing in property related matters for a number of years. He has always, however, been involved in residential and commercial property in one way or another. His son, JC Breytenbach, joined his operation in early 2013 after acquiring ten years’ marketing experience in property, firstly in residential property developments and later with the JHI Group on the commercial side.

The reasons for Tshwane’s commercial property upswing, said Breytenbach senior, in fact go back many years.

“Regrettably,” he said, “there has for some time now been a progressive decline in the quality of the commercial properties and office space in the Pretoria CBD, as has happened in Johannesburg and Durban. This has led to a move by the business fraternity to such outlying areas as Montana in the North, Midrand and Centurion in the South and the Eastern precincts of Pretoria such as Menlyn, Equestria and Silver Lakes.”

“Furthermore there has been a noticeable change in the size and type of offices required by businesses today. Businesses are now typically looking for ‘A’ grade offices, with 60 m2 to 120 m2 of space and not the large, often open-plan premises of yesteryear. In addition most are determined to own their own offices, realizing only too clearly that annual rent escalations do make long-term renting a far less attractive proposition than owning.”

Sales prices, added Breytenbach, can and do fluctuate, but on average most of the offices he is selling go for between R10,000 and R15,000 per m2. In July, for example, he sold offices of 120 m2 for R1,5 million, 80 m2 for R860,000 and 95 m2 for R1,25 million.

“Obviously the price is entirely dependent on quality and position, but in general it can be said that such premises do offer investors good rental returns: they rent out at rates above that of investments in the money market and of residential property, i.e. at 8 to 10% from day one, with annual increases of around 7%. For this reason there is a growing demand from buy-to-rent investors, many of whom are building up property portfolios, with the result that stock is now in short supply.”

Such investors, he added, often show an equal interest in industrial and retail space, both of which are also handled by this franchise.

Despite stock shortages, Breytenbach is predicting that, within the next year, the steady demand will have ensured that his turnover has doubled – as it has done over the last year.

Asked if being part of the Rawson Property Group has helped his operation, Breytenbach said that the brand, although new to Tshwane, has been welcomed like “a breath of fresh air” and the Rawson residential property franchises run in the area have proved to be a very valuable source of referrals.

“The message I have to get across to the Tshwane public,” said Breytenbach, “is that there could not be a better time to invest in commercial property in this area and I should add that it pays to have a qualified attorney/ conveyancer such as myself working as your agent.”

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