Situated less than 20km from Cape Town city centre, the industrial node of Elsies River has experienced a significant increase in demand for property – to a large degree attributable to the rejuvenation of the area through the recently implemented CID (City Improvement District).
With 24-hour security patrols, crime rates have dropped, roads have been repaired along with the potholes and the area is clean and appealing.
Says Drew van Heerden, property broker for Annenberg Property Group: “This area has seen a complete turnaround which has resulted not only in a growing number of enquiries from businesses wanting to move into the area, but also successfully concluded sales. These include a 1 800sqm building plus a yard of 1 842sqm which sold to a local investor for R4.5 million, and a building of 1 990sqm which was acquired for R4.565 million by an owner occupier, who has relocated from a surrounding area”.
“Properties in the size range from 1 000 to 2 000sqm are now sought after among owner occupiers looking for value and to be centrally located. These include various light manufacturing industries as well as transport operations. In general properties move fairly quickly and there have not been many long term vacancies. All the positive changes achieved via the CID are paying dividends, and the area is now perceived as providing a well-timed opportunity to acquire property with the potential for sound growth and income returns”.
“Property and rental prices in the area are on the increase, but good value is still to be found in Elsies River Industrial. This is also home to one of Growthpoint’s prime industrial business parks, Central Park, which is tenanted by some large national users. The industrial park rarely has vacancies and achieves above market rentals compared to surrounding areas.”
Located in a quiet cul de sac the first property, which houses three strong tenants, achieved an excellent yield of 9.5 percent. The tenants include a transport and storage company, powder coating company and a panel beater.
Says van Heerden: “The purchaser was looking for an investment which met a number of criteria. In addition to seeking a property which would provide good returns and offered underlying value in an upcoming area, they wanted premises they could occupy in the future as their current business grows, plus a location with accessible public transport”.
“In addition, this property has a large, secure yard which is rare in the area, and has the potential for expansion. Its situation experiences less traffic and allows for easy deliveries and dispatches, while it is close to multiple public transport options. With an erf size of 3 642sqm, the new owner also has the option of relocating their business to the premises when their operation needs to grow.”
The other recent sale was on behalf of Window Door Store Cape who were seeking acquire a property centrally located as a distribution point and in a secure area with a CID, with good work flow for their operation and large enough electricity supply for their machinery and for future growth. Manufacturers of premium wooden windows, doors and blinds, they have refitted the building for their needs.
Situated on an erf of 2 854sqm, the property is well built and borders the road on three sides, providing good exposure for passing traffic. It also has the benefit of access to the premises from multiple points, which allows for ease of ingress and egress during receiving and dispatch, and is close to various modes of public transport.
Formation of the CID.
The CID was formed some years ago as a result of a group of concerned property and business owners who took the initiative to seek solutions to urban decline in the area. Incidents of crime and grime including illegal dumping and general urban degradation were escalating, and so they began the process of establishing a Special Rating Area (SRA), commonly known as a City Improvement District in the Elsies River Industrial area, which commenced operations on 1 August 2015.
John Houston, local business owner of Makeshift 1104 and part owner of Emplast took on the responsibility of setting up the CID, with the vision of establishing and maintaining a safe, clean, well-managed industrial area that attracts and retains business investment and industry activities in the area.
“My single biggest concern was to find the ideal manager,” says Houston. “After looking at other areas under CID control we selected Geocentric due to the way they were managing these areas. It is one of the most exciting ventures that I have been involved in to see the continuous daily improvement and transformation and we now have a sound, safe and secure area. The Geocentric cleaning team is like a giant vacuum cleaner that appears to have mountains of energy keeping the area neat and tidy.”
“To achieve this we have a dedicated manager in the area, dedicated foot and vehicular patrols performing public safety duties and a dedicated urban cleaning and maintenance team that immediately tackled the illegal dumping and littering and started repairing some of the municipal infrastructure in the area”.
“We established good working relationships with officials in the City and they also started to bring more resources to the area to address broken and degraded infrastructure and repair items such as street signs, traffic signs, street lights and storm water drains.”
Property owners were so impressed with the progress after just four months that this resulted in the donation of enough funding to install, operate and maintain eight CCTV cameras. Installed in strategic locations and monitored 24/7 by a control room, these provide extra ‘eyes and ears’ to the patrol officers in the area.
“We believe we have made a significant impact on crime in the area and have cleaned up the area to such an extent that new investors want to own property here,” says Lohrentz.