Land prices surging

The town of Meyerton in the south of Gauteng is set to benefit from a decision by the Midvaal Local Municipality to establish a development corridor along the R59 freeway, a key regional route that connects Johannesburg and Ekurhuleni to the Vaal Triangle. A section of the R59 runs through Meyerton, providing a lifeline to the south of the province.

Comments Stoffel van Rensburg, Pam Golding Properties area principal in Meyerton: "With already very high numbers of traffic along this route, and following a full feasibility study, the local municipality has decided to develop this region as a corridor development, divided into four major nodes — one of which is Meyerton.

"This project has the potential to transform Meyerton into the next economic hub in Gauteng — with appeal for key stakeholders from all major sectors of the economy. It also offers significant spin-offs in terms of providing major opportunities for developers, particularly as this area can accommodate development for a wide variety of uses such as heavy industrial — including large-scale manufacturing, warehousing, commercial and urban residential use.

Six fold increase in land prices

"Already property prices in the area are soaring. Land adjacent to the R59 and in the development nodes which usually sold for approximately R50 000 per hectare is now selling for up to R600 000 a hectare for raw land (i.e. not rezoned). While this sounds high it is still very reasonable when compared to other similar projects such as the R21 and Midrand corridor developments, where starting prices are around R3.8-million per hectare.

"Very good buys are also still available in the Meyerton area for companies willing to rezone themselves and those which do not rely on highway frontage for exposure. In this regard land situated just off the highway, but still in the corridor area, also affords sound investment opportunities."

Van Rensburg says most of the developers currently in the market are looking at areas of between 20 and 50 hectares — mainly for the development of smaller industrial parks.

Strong demand for land

"There is a great deal of interest for land here, particularly among larger companies which seek to capitalise on the challenging economic conditions to acquire land at better prices. Of benefit is that most of the land is currently zoned agricultural — which can be rezoned to accommodate the buyer.

Currently PGP has mandates on approximately 300 hectares of such land, priced at around R500 000 per hectare for land positioned on the highway and from R350 000 per hectare off the highway. While investors generally look to purchase large parcels of land between 10 and 100 hectares in size, businesses tend to seek land ranging in size from two to 10 hectares.

"Construction of the Dutch brewer Heineken's Sedibeng brewery on the R59 at the gateway to the corridor, about 15km from the Meyerton CBD, has further raised the profile of this development node and bodes well for further development and investment in the area," adds Van Rensburg. "With very little land available in other major corridor developments in the area, this will definitely be the next major route development in Gauteng."

Article by: www.iafrica.com