Despite initial resistance to the project and the Gautrain effectively trading in the red for its first few years, it has certainly been a catalyst for growth in demand for commercial property in the decentralised CBDs of Sandton and Rosebank, both of which are experiencing rental growth in excess of 10% per annum.
For some time, following the increased take-up of the convenience of the Gautrain and a shift in the mind-set of commuters to these congested nodes, proximity to public transport has been a primary condition for commercial tenants exploring new office options.
The award-winning 36,000 sqm Alexander Forbes Sandton head office, developed by Zenprop, Webber Wentzel's imminent move from Illovo Boulevard to Sandton central, Sasol's new head office development by Alchemy Properties and Discovery Health taking up Growthpoint's site opposite 1 Sandton Drive are testimony to the economic benefit that such infrastructural development has brought to Sandton and South Africa.
Rosebank in particular has seen substantial growth with Standard Bank's new R2.2 billion, 65,000 sqm head office recently commissioned and Hyprop's current extension to Rosebank Mall - taking it from 35,000 to 62,000 sqm. Property Fund's acquisition of The Galleria site with its 33,500 sqm of office and retail space and Growthpoint's 40,000 sqm corporate office site, opposite the Park Hyatt Hotel, shows that Rosebank is fast becoming the destination of choice for discerning companies.
This is clear evidence of the impact the Gautrain development has had on these nodes and we look forward to further infrastructural spend by the public sector to boost growth in a time when macro-economic constraints have limited growth in the commercial space in general.
The economic impetus of the Gautrain development has led to new routes being proposed to link the east and west corridors of Johannesburg. The proposed network will include a link from the existing Gautrain Park Station to Westgate on the West Rand; a link from the existing Rhodesfield Station to Boksburg on the East Rand; a rapid rail link from Naledi in Soweto to Mamelodi - via either the proposed Gautrain Samrand Station or the existing Gautrain Midrand Station; and a link from the existing Gautrain Sandton Station to Randburg, a public transport hub.
Sandton and Rosebank have appeal for multi-nationals seeking to establish a presence in Johannesburg as a springboard into Africa. For example, the company recently concluded a lease for 1400 sqm of office space on behalf of the Canadian-based Platinum Group Metals in 24 Sturdee Avenue in Rosebank. Its request was to be close to the Gautrain Station as its international management teams land at OR Tambo then need to be able to take the Gautrain to the office.
Generally, multi-nationals, their subsidiaries or local corporates are seeking prime located, modern space from around 500 to 2,000 sqm.
While rentals in new build office accommodation in Rosebank and Sandton are in the region of R175 per sqm, 'green' builds can command rentals of over R200 per sqm. "While 'green' buildings represent a significant capital outlay and therefore premium rental, there are long term savings in terms of operating costs - a factor of increasing importance.
