Sam Mhlaba, CEO of SCM Holdings, responsible for construction of the multi-billion rand affordable housing project at Randfontein, says the key to integrated developments is the rail link. The experience of Rosebank and Sandton suggests this is so, but their high price tends to exclude those areas for affordable housing purposes.
Rosebank, according to the latest Rode Report, is the most expensive office property node in the country, beating sister node Sandton. Both have Gautrain stations at their heart. The report, published by property economists Rode & Associates, shows that in the first half of 2019 Rosebank’s average grade A+ (or premium grade) office market rental stood at around R245/m².
The office sector of the property market is currently experiencing higher vacancies with the South African Property Owners Association (Sapoa) national office vacancy rate sitting in the double digits. Rosebank has an office vacancy rate of 7%, which is significantly lower than the over 18% seen in Sandton’s CBD.
Pretoria’s growing Menlyn and Brooklyn nodes have premium office rentals averaging between R198 and R200/m², while Durban’s expanding main grade A+ office node of Umhlanga/La Lucia had office rentals averaging the R180/m² mark.
Kobus Lamprecht, head of research at Rode & Associates, attributes the high vacancies in Johannesburg’s two top office nodes (Sandton and Rosebank) to overzealous new developments. “These nodes have temporarily become the victim of their own success.”
Rosebank’s rentals have constantly averaged higher than Sandton’s since 2017, and its vacancy rate has improved to stay below 10%, while Sandton’s vacancy rate has worsened significantly.
Pieter Strydom, commercial asset manager at Redefine Properties, says, “Redefine is not surprised by the fact that Rosebank is home to South Africa’s most expensive office node. This is attested by the investments we made over time in anticipation of the growth of the node. Rosebank, like Sandton, has benefitted from the Gautrain station based in the node. However, it also boasts better access as a more integrated node that is easily accessible by foot and is smaller than Sandton.”