Business development provides opportunity for investors

Why rent office space over the long term, when it makes more sense to buy? asks Mike Walters, Divisional Head of Renprop Commercial, a company specialising in both the leasing, sales and development of commercial property.  

Walters notes that many small to medium sized businesses could be creating wealth in a separate entity by paying off an appreciating asset if they chose to buy their office space instead of rent for a period of more than eight years.

“While renting office space allows businesses the freedom of moving to another location without too much hassle, if a business is in the financial position to do so, purchasing the building or office space will provide an inflation-hedged investment that will either match inflation or outstrip it in terms of growth. After an eight year period, the money spent on rent could essentially go towards ownership of an office building over time and be an asset. As the capital value of the property increases, so will the company’s investment and asset base,” says Walters.

He adds that investing in commercial property is a far less volatile option than investing in the share or equity market provided that the property is situated in a prime location with the tenant as the business and the shareholders as the landlord. “The key to purchasing a commercial property is finding a location that meets all the needs of the business, while positioning the business within proximity to major amenities and business hubs.”

Walters points to one of Renprop Commercial’s latest projects, 110 Conrad Corporate Office Park, as a prime example. Well situated on the corner of Conrad Drive and Jan Smuts Avenue in Craighall Park, 110 Conrad will be made up of eight sectional title office blocks ideally suited to small and medium size businesses.

Five out of the eight units within 110 Conrad are available for purchase at around R17 500 per square metre. These units are also available for lease. The well known Hackle Brooke conference venue is already operational within this development and all services and infrastructure is complete.

“This location of 110 Conrad is excellent as it is proximate to the financial hub of Sandton while still offering easy access to other commercial centres such as Rosebank and the Johannesburg CBD. It is also well located close to major transport routes and other facilities such as the Colony Shopping Centre, Planet Fitness Gym and a variety of restaurants. The Hackle Brooke conference venue offers a conference centre and meeting room facilities within the 110 Conrad development as well as coffee shop and restaurant ideal for light lunches and informal meetings,” says Walters.

The current plans reflect buildings that offer two floors of office space ranging in size from 100m2 to 1300m2, with basement parking below and ample visitors parking provided for. Investors can expect occupation from early to mid 2014.

According to Walters, those wanting to create wealth for the shareholders of the business through the purchase of office space but who are unable to pay cash for the building can apply for finance. He says business property loans are usually calculated over a ten year term and a deposit of approximately 30% or more will be required.

“A business that is well positioned will have a distinct advantage in today’s challenging and competitive trading environment. Office park developments such as 110 Conrad provide businesses with the opportunity to be in a prime location and have the option of growing their asset portfolio,” Walters concludes.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us