Obtaining prime land in close proximity to or in a sought-after suburb is key to any property developer’s success, says property firm Seeff.
There is unobtainable land in South Africa that even the uber-wealthy would have trouble affording if it was for sale, the company said.
Two examples of invaluable, but unobtainable land in Johannesburg include the land on which the Tara Psychiatric Hospital in Hurlingham is located, as well as the grounds of the Johannesburg Zoo in Saxonworld.
And the reason they are off limits? Both have been exclusively zoned decades ago for a specific purpose and it has to remain that way.
Tara Psychiatric Hospital was originally a large and opulent house built in the style of the 1930s, owned by the Tillett family. Visitors and residents approached through majestic gates on the south side of the property, down a driveway which ended in a circle under the decorated portico.
In 1942 Tara was sold to the government and became the Defence Force Inland High Command Headquarters during the late stages of World War II. Towards the end of the War the property was leased to the Red Cross and Major Jack Penn’s renowned plastic surgery unit was installed.
When demand for plastic surgery declined, Tara was transformed into a pioneering mental health hospital and today it is a public sector specialised psychiatric hospital, rendering specialised services to people with serious mental illness.
Charles Vining, Seeff’s MD in Sandton, says the land on which Tara is located is extremely desirable, but cannot be used for residential purposes.
“Tara is zoned in the suburb of Hurlingham, and the highly desirable suburb of Sandhurst begins on the opposite side of the property, in Saxon Road (where the Saxon Hotel is). Homes in Sandhurst are priced from R10 million, but most often upwards of R20 million.
The land on which the hospital is located is about 11.5 hectares (29 acres) in size. An acre of land in Hurlingham is priced at around R8 million. Applying this math, one would calculate the land value of the Tara hospital property at R230 million. If you look at prices in Sandhurst however, stands cost between R12 million and R16 million per acre and so the Tara land could in fact be worth more than double the estimated R230 million.
The conditions of the title deed to the Tara erf stipulate however that the land may only be used as public space and for this reason it will not likely be able to transfer to a private owner,” said Vining.
Vining continues that the land on which the Johannesburg Zoo is located was donated years ago by the firm of the late Hermann Ekstein, upon condition that it should be used as recreational space.
Ekstein’s commitment to making Johannesburg a beautiful and enjoyable place to live is evidenced by the fact that decades ago Ekstein was extensively involved in the development of the new mining town in Johannesburg. He had three million trees planted in an area which he christened “Sachsenwald”, now the leafy suburb of Saxonwold.
The Zoo is 55 hectares (140 acres) in size and has been in use since 1904. Today it is home to 200 individuals of 320 species.
“It is difficult to put a value on this type of land in Saxonwold as it is effectively priceless, but one could use a mathematic calculation based on the price of an acre of land in Saxonwold (R8 million) or neighbouring Parkview (R2 million per acre). Since the Zoo is 140 acres the value could be calculated at near R1 billion.
Vining concludes that in addition to this property becomes more valuable when large tracts of land suitable for development can be bought together.
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