Capital Investments' recent procurement of Tyger
Chambers 3, Block C, on behalf of its fund (City Capital SA Property
Holdings Limited, trading as Capital Investments SA Property Holdings), has
been an investment based on strong fundamentals.
Investing in quality, well positioned AAA Grade developments such as the
Tygervalley Chambers 3 development, which is attracting national tenants on
increasingly long leases, fits well into the company's investment
philosophy, aimed at securing solid income streams and explosive capital
growth over the long term.
Says Elton Faber, Director of Capital Investments Properties, "The
Tygervalley commercial hub, owing to good quality tenants and high property
demand in the area, has seen capitalisation rates hold steady over the past
year. This has happened even with the recent adjustment of lending rates as
investors in the current market find it difficult to find quality stock."
Close to Tygervalley Shopping Centre, with excellent accessibility and
within close proximity to the N1, this highly sought after office space,
designed by DHK Architects, comprises 5 levels with lifts, superb upmarket
finishes and a deck area supplied with each office. Secure basement and open
parking are also available. The Tygervalley Chambers Phase 3 development
will also contain a gym and canteen.
The total lettable area of 2,767 m2 (excluding common areas and circulation
space), is available at competitive rate per square metre from 28 February
Andre Krige, Director of Sector 5, who concluded the transaction, described
the acquisition of the office development as "an extremely viable investment
in the current property cycle. Sustained economic growth has underpinned
take-up rates resulting in a further decline in vacancy rates in all sectors
of the commercial property market, especially the office market which should
produce double digit rental increases in the medium term."
In addition, the supply constraints to new offices are being influenced by
significant government infrastructural expenditure which is placing further
pressure on building costs and reducing the viability of some (marginal)
Continues Andre, "Therefore, even with the strong growth in rentals in these
sought-after decentralised nodes, the rise in building costs will probably
have to see rentals of R110m2 to be feasible to a developer in short term.
Investing in quality, well positioned A Grade developments such as the
Tygervalley Chambers 3 project, should fit well into anyone's portfolio who
is looking for a secure, escalating income stream, coupled with the prospect
of explosive capital growth once the current interest rate cycle depreciates
in the medium term."
Adding to Andre's sentiments, Elton concludes, "Our
capital-appreciation-driven return of our property portfolio is due to an
area driven procurement process. We believe that choosing the right property
in the right location will generally produce larger and faster capital
appreciation. Tyger Chambers 3 has shown over 16% capital growth over the
past 6 months and continues to climb. Aesthetically pleasing buildings such
as Tyger Chambers 3, situated in established or growing/up-coming business
nodes where higher demand from both sales and letting is experienced is thus
the aim. This provides a 'less risky' investment for our fund and in turn
Capital Investments remain focused on owning and managing premier commercial
properties in select, supply constrained, high growth markets. Through
disciplined asset and capital management, Capital Investments are committed
to increasing their investors' return on capital and maintaining growth.