During 2015, Renprop had one of the busiest years in the history of the company in terms of launching new residential developments. The company successfully launched 11 new sectional title developments equating to close on 1 700 units in the northern Johannesburg suburbs over the past 18 months. Strong residential development is set to continue in a number of these northern Johannesburg neighbourhoods during the year ahead, according to Chris Renecle, MD of Renprop.
Renecle confirms that Renprop has plans in place to launch at least five new residential developments during 2016, which will amount to more than 500 sectional title units being brought to market. “This is based on the projects for which we already have development rights in place,” he says.
These planned developments, where units are expected to be priced between approximately R600 000 and R3million, will be well located in key northern Johannesburg suburbs including Morningside, Rivonia, Ferndale, Rosebank and Bryanston.
Renecle says that location is one of the single most important factors that contributes to a property’s success as an investment, and the areas in which Renprop developments are planned have all shown strong, pent-up demand for sectional title apartments from both investors and tenants alike. “Our recent developments in these areas have seen investors achieve strong returns in a short period of time, which indicates the level of demand for sectional title space in these areas,” says Renecle.
He notes that what has made these areas so popular among investors is that they all offer an excellent array of amenities from shops and schools to restaurants and medical facilities as well as easy access to public transport facilities such as the Gautrain or major highways and byways. They are also all situated relatively close to the Sandton/Rosebank business hubs.
When it comes to Bryanston, Renecle points out that the area has become a new, sought-after node for corporate headquarters, and the demand for residential apartments in the area has increased significantly in direct correlation to all the new offices which have been built and the subsequent number of big blue chip companies which have moved into the node.
Renecle is of the opinion that aside from offering excellent investment potential, properties in these select northern Johannesburg areas will also benefit from the strong rental demand.
“The strong rental markets in these areas are being underpinned by a lack of 100% bonds available to buyers – especially first time and investment buyers – which was further compounded by a shortage of stock available earlier in 2015,” says Renecle. “While development of new residential properties has started to make an impact on the market, there is still substantial pent-up demand for sectional title apartments in certain areas of Johannesburg. Added to this, many potential buyers are renting properties while they save up for a deposit, or they are waiting until they earn enough to qualify for the home loan amount they need to purchase the home they desire.”
Renecle believes that residential property will remain a good investment option for 2016, despite a lacklustre economic outlook. On the commercial side of things, he says that while flat trading conditions are expected, there will be some movement in the office space sector in select areas. “Bryanston and Rosebank are the two areas to watch in this regard. Renprop will soon be launching a 10 000m2 sectional title office scheme on Bryanston Drive to cater to this location-based demand, while in Rosebank construction has started on The Tyrwhitt apartment development, and The Median, Renprop’s 120-unit apartment block on the corner of Tyrwhitt and Cradock Avenues, is set to launch later this month.”
