This sizeable industrial property is strategically well situated in Middelburg, and goes on auction on 25 February 2016 through Broll Auctions and Sales.
Prime location sites with high exposure and well suited to the development of offices or retail do not often become available for acquisition, particularly strategically positioned sites which have not changed hands for long periods of time.
So says Norman Raad, CEO of Broll Auctions and Sales, commenting on two versatile development sites which, among other properties, go on auction on 25 February (2016) at The Wanderers Club in Johannesburg.
“While ideal for the likes of head offices, showrooms or retail development, their redevelopment potential is unlimited in terms of use as they offer huge exposure to thousands of passing vehicles every day. Located in Parkwood in Johannesburg and Hurleyvale on the East Rand, these rare properties form part of a corporate disposal where corporate governance and regulation dictates they must go to auction.”
Situated in Jan Smuts Avenue, with Rosebank, Melrose, Saxonwold and Parkview in the immediate vicinity, the Parkwood redevelopment opportunity comprises three adjacent stands consisting of a total of 3 123sqm enjoying high exposure as they front directly onto Jan Smuts Avenue with easy access off Oxford Road. Parkwood is predominantly a residential area with the commercial hub of Rosebank and Rosebank Mall less than 1km away.
Although the Hurleyvale site, which comprises three adjacent erven comprising 3 353sqm in total, is currently zoned for residential use, indications are that conversion to Business 1 zoning would not pose any issues as this is one of the last non-business zoned sites in the vicinity, well positioned in St Anne Road which is the main road in Edenvale and with high exposure to busy Van Riebeeck Avenue. There are five unfinished structures which can be renovated for residential use or alternatively rezoning would enable the accommodation of three small businesses with good size yards, ideal for owner-occupiers.
Located just off the R21 Van Riebeeck Road offramp and only 1.1km from the N12 Edenvale exit, the Hurleyvale site is approximately halfway between OR Tambo International Airport and Johannesburg city centre, some 12km from Sandton. OR Tambo has been highlighted as an economic hub, with the Ekurhuleni Aerotropolis programme aimed at driving economic growth in the region over the next 30 years and including initiatives to revitalise a range of industries.
A further property with sound investment potential which is to be auctioned on the same day is a large warehouse in Middelburg in Mpumalanga with a gross lettable area of 12 972sqm set on an erf of almost 3.14ha positioned on a main road in an area which sits between Johannesburg and Nelspruit. “This is a strategically strong location, with high density passing traffic and four retail tenants, including a restaurant. One of the tenants is vacating the property at the end of April (2016), presenting an opportunity for an owner-occupier. The property can be used for storage, distribution or warehousing and is ideal as a base for main retailers servicing the Mpumalanga area,” says Raad.
There is ample parking on site and sufficient space for larger trucks to load and offload goods as well as a covered wood yard to the left of the property which can be used for storage. As the name indicates, Middelburg is between Pretoria and the gold mining town of Lydenburg, with the auction property located on the main arterial route through the city centre, with easy access to the N4 and N11 highways.
Commenting on the commercial property market in general, Raad says while there is no question that this year the property market will be tough, by its very nature it presents opportunities for savvy buyers to make acquisitions such as these, particularly as sellers become more flexible and realistic regarding expectations. “We believe that apart from the obvious appeal of well-priced and well-situated properties across all sectors, retail centres and fuel stations will be sought after”.
“The market has enjoyed years where demand has exceeded supply. Sellers who face some funding constraints may look to reduce their exposure and sell off some of their assets, but the market will not be running to pay low yields for anything this year, especially with the uncertainty as to when interest rates will stabilise.”
He says the market differs from last year with a variety of factors to be taken into consideration when buying, selling property or simply investing in the REITS (Real Estate Investment Trusts). Inflation, increasing municipal costs, increasing interest rates, general sentiment and the depreciating rand are some of the challenging influences faced.
“The auction platform will see a lot more properties this year and there has already been a shift in the purchasing yields north of 10, 11 and 12 percent. This was unheard of the past few years, yet today it is a reality. Sellers have held out as much as they possibly could but they too have started to become more realistic in their asking prices and yields. However, the property market in South Africa is cyclical and while short term investment prospects may seem less attractive, the market has always shown resilience and over time it will bounce back”.
He adds: “The auction industry needs buyers to participate, so we have tried to make it easier by reducing the deposit and commission amounts payable on the day. For selected higher value properties the commissions have been reduced, while the commission rate has remained the same for lower value properties.”
The Broll Auctions and Sales auction takes place at 12h00 on Thursday 25 February 2016 at The Wanderers Club in Sandton, Johannesburg.
