Hot property stops

Toot toot: The commercial property surrounding what will be Rosebank’s Gautrain station has become hot property as a trend seen all over the world becomes a reality in Joburg. Picture: Muntu Vilakazi

Buildings near Gautrain stations now worth a fortune

OFFICE buildings near Gautrain stations are the province’s newest property hot spots.

And with experts saying Gauteng’s office space shortage is the worst it’s been in 10 years, prices are set to shoot even higher.

The local housing market may have slowed, but office space is in hot demand, said Wits Property Studies professor Francois Viruly.

“In the last few years everyone was talking about the residential market, but the focus has now moved to the commercial market, ” he said.

And office buildings close to Gautrain stations like those in Rosebank and Sandton are veritable gold mines.

“Overseas markets have shown that any property 20 minutes’ walking distance from a rapid rail transit system tends to do very well,” said Viruly.

He also said the “nuisance” factor of high levels of human traffic and noise was outweighed by the convenience.

South African Property Owners Association CEO Neil Gopal said the local property market was set to follow the international trend.

But he says commercial property rental costs will “correct themselves” over time.

Property expert Graham Ewing said the current property shortage relates to “suitable” office space. Companies were reluctant to move into older buildings in “less desirable areas”, like the CBD.

And Viruly said the new demand was due to a shortage of office space “that is probably at its worst in 10 years”.

“There is a supply and demand problem in the market, especially for tenants looking for big spaces,” he said.

Rising construction costs are forcing companies to rent space rather than build and buy it — and there isn’t enough to go around, so office rentals will soon go through the roof.

“High construction costs have been spurred by big infrastructure projects, so new space coming onto market will be at a very high price,” he said. Already high building costs are rising at between 15% and 20% every year.

“This means that existing leases will be very attractive. Even though rentals are escalating, it is still more affordable than moving into a new building,” he said.

Article by: Shanthini Naidoo - www.sundaytimes.co.za