Changing of the seasons within South Africa’s commercial real estate sector
Everything in life has a season, and the commercial real estate market is no exception.
While South Africa’s economy was stuck in a seemingly endless winter of corruption – with poor service delivery, cost of living increases, load shedding, and a junk status credit rating – spring arrives with new shoots of optimism promising better times ahead.
The emerging positive sentiment has been driven by several factors, including the continued absence of load-shedding, a stronger Rand, the formation of the Government of National Unity, and the first interest rate cut.
“Nowhere is this more apparent than the record turnouts and competitive bidding we have witnessed at our auctions recently,” said Norman Raad, CEO of Broll Auctions and Sales.
“South Africans are keen to get on with business and do deals. The time has never been better to buy or sell commercial property.”
“I was recently abroad and can easily say there is no better place to live and invest in than South Africa. The opportunities, the people, the lifestyle – we have the best in the world right here,” added Raad.
Broll Auctions and Sales
Broll Auctions and Sales has 38 commercial properties on their October 16 auction.
These include the historic Radium Beer Hall – one of Johannesburg’s oldest watering holes still in operation.
It boasts a rich history dating back to 1929 when it was a tea room and illicit shebeen.
“This sale gives the new owner the opportunity to take the Radium into yet another century for future generations to continue to enjoy its vibe and offering,” Raad said.
Another flagship property on auction is a thriving township filling station leasehold in Cosmo City, near Lanseria Airport.
This leasehold Engen filling station (Property Lease and Business) is a strategically positioned corner site and forms part of the Cosmo City Shopping Centre.
It pumps an average volume of 400,000 litres per month.
A prime retail facility tenanted by Cashbuild in Standerton, which has just signed a new 10-year lease, will also go under the hammer.
This low-risk, high-reward opportunity recently underwent a significant revamp and is a rare asset to go under the hammer.
The Illovo Edge office block in Johannesburg has strong returns from highly sought-after tenants.
This facility is a green-star-rated, fully-let sectional title P-Grade office block.
Furthermore, the well-established Sterland Mall in Arcadia, which is being sold at a greatly reduced mandate, offers an outstanding opportunity for an investor to use its current configuration for redevelopment in a high-density residential node.
National corporate disposals
“Off the back of a successful corporate disposal of 8 buildings in the Johannesburg CBD sold at our last auction, we have another offering of 10 assorted properties located nationally at vastly reduced mandates unlocking excellent value,” said Raad.
These include 88 on Field and Pine Parkade in Durban Central – both well-known landmarks in the Durban CBD.
This is in addition to three pieces of valuable vacant land, adjacent to the Kingsmead Cricket Stadium, which are being disposed of by the SABC.
Other assets to come under the hammer in the Western Cape include a fuel site and operations in Kuilsriver, and a stunning ex-motor showroom for sale on Oudtshoorn’s bustling N12.
Retail and office sector show recovery
According to stats recently released by SAPOA, the number of vacancies in the office sector has once again decreased for nine quarters running nationally.
The data for Q3 2024 showed a decrease to 13.6%, which is 3.1% below the high point for office vacancies.
This means greener pastures are ahead for this hard-hit sector as South Africans return to physical offices.
All signs point to a growth phase for the retail sector, with positive rental reversions in the retail space.
The changing of the political guard and improved financial outlook are also translating into increased interest and investment in the commercial real estate market.
Furthermore, data points to a clear increase in demand during the spring and summer periods.
“Studies have shown that this seasonal boom period drives higher sales volumes,” said Raad.
“Increased demand means properties are on the market for a shorter period, and this competitive period can increase average sales prices,” said Raad.
“There has never been a better time to plant the seeds to future wealth by investing in commercial property right now.”
“The combination of a favourable investment climate, economic reforms, and improved stability is creating a positive outlook for the commercial real estate market. Buyers who get invested now will reap the rewards of their investment in the future.”
To view any of the properties mentioned or for a full list of assets on auction at The Wanderers Club in Illovo on 16 October, contact Broll Auctions and Sales on 087 700 8289 or view them on our website.
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