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New confidence boosts Pretoria East property market

A tentative resurgence in property confidence that became evident at the end of last year in Pretoria East has gained further velocity this year in the commercial as well as residential sectors.


 
Two factors are in play in the residential sector, says Dennis Hamer, owner of top local agency Harcourts Capital. “Banks are once again willing to fund new residential development and that enables developers needing finance to dust off development plans that were shelved because of the recession. Then secondly, developers with own resources are re-entering the market thanks to the message of confidence being sent out by lending institutions.”
 
His franchise is currently marketing four new boutique residential developments, the first being in Lynnwood Manor and offering a total of 10 sectional title units, of which six are still available at prices of between R1,4m and R1,9m. Units are between 90sqm and 120sqm.
 
Nine full-title homes of around 300sqm each are on offer in another exclusive development in Lynnwood Glen at prices of around R2m, he adds, while in Val de Grace, Harcourts Capital is marketing a new apartment development of 50 one and two-bedroom apartments ranging in size from 62sqm to 84sqm each and priced at under-R700 000.
 
Another large development currently planned for Faerie Glen will offer 62 units. The site has been secured and building plans are currently being finalised. Hamer says prices and sizes will be available shortly.
 
Meanwhile, the renewed market confidence is also evident in the commercial sector. Older office blocks in Pretoria East are increasingly being targeted by buyers who are switching from renting office space to owning their own buildings, Hamer says.
 
The intense development of new commercial space in the past few years has now opened the market to smaller investors who have made their calculations and prefer to invest in their own office space. Rentals have escalated on the back of new developments and for many smaller investors ownership now makes sound financial sense. "And the fact that buyers are willing to make long-term investments in property is a strong vote of confidence in the local market as well as their economic prospects,” he says.
 
Hamer says his office has sold two office blocks in the past two months and that several clients are currently scouting for suitable investments.“Office blocks that have high vacancies are especially suitable for owner occupation  purchase opportunities. Leases of existing tenants are taken over and unoccupied space is typically taken up by the new owner. Buyers include professional firms such as attorneys and architects, as well as embassies.
 
"Another interesting trend is that new owners often attract tenants in related disciplines, which leads to clusters of expertise such as, for instance, architects, town planners and quantity surveyors all in one location," he says.
 
Space in Pretoria East’s modern office parks is currently leasing at between R120 and R140/sqm, while offices in older blocks are leased at around R80 to R100/sqm, and listed property funds are all showing confidence in the area, where Emira Property Fund has already developed the Podium Office Park of 15 000sqm and is finalising a 10 000sqm extension, Hamer notes
 
“And while Sun International has applied to have its casino licence for the Marula Sun transferred to a site in Menlyn Maine, the Atterbury Fund is already developing three more office buildings on the vacant site to the north of its Lynnwood Bridge development, and Growthpoint recently completed the FNB consolidated park in Menlyn.”
 
And, he says, the marked growth in new office space in the Menlyn area can be expected to further boost demand for residential property in Pretoria East, since higher fuel prices and the pending implementation of the Gauteng road tolls will no doubt prompt many consumers to seek homes closer to their workplaces.


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