Nelspruit infrastructure improvements draw national companies, investors

All sectors of the Nelspruit property market are now benefiting from upgraded infrastructure, and investor appetite has been whetted.
The city, seat of the Mpumalanga government and commercial hub of the province, now boasts infrastructure on a par with other large commercial centres around the country, says Juan Botha, owner of top local estate agency RealNet Nelspruit.

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"The commercial property market is particularly active at the moment," he says, "with several large national concerns having taken up office space to establish regional offices, as well as distribution centres and warehouses. Some companies have also bought commercially-zoned land and are in the process of building custom designed offices and other commercial space."
A-grade office space in Nelspruit now commands monthly rentals of between R100/sqm and R130/sqm. Retail space is letting for between R100/sqm and R300/sqm depending on location, and light industrial space for between R40/sqm and R70/sqm
Botha adds that commercially-zoned development land has become scarce and that companies and investors are vying to buy available land parcels. "Nelspruit has experienced a sharp increase in demand and 18 stands at Riverside Park Extension 22 Industrial Park recently sold quickly at prices ranging from R2m to R15m," he says.
The influx of commercial concerns has also boosted the local residential property market and demand is putting pressure on stock levels, particularly in theR700 000 to R1,5m price range. Botha says there is a great need of new development in this price range, especially since investors have now returned to the market and are competing with homebuyers in this range.
"Investors realise that they can earn returns of between 7% and 8% on local residential property,as opposed to between 2% and 4% if they hold their investments in bank deposits. And demand is likely to escalate further on the back of a new private hospital under construction between Nelspruit and White River, as well as the new local university. Investors are already sourcing apartments and houses suitable for student accommodation and we expect that trend to gather momentum."

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But, he says, the biggest concern in the residential sector is overpriced homes that are getting ‘left behind’. “Sellers need to realise that buyers are well-informed and will not overpay for property, even in areas where there is a shortage. The banks are also strict on valuations and will not overvalue any property.
“Experienced residential estate agents will do accurate comparative market analyses (CMAs) before starting to market a home – and the advantage of working with such agents speaks for itself, as the homes they market generally sell within 30 days of listing and the banks are eager to finance these purchases.”

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