The demand in Sterkspruit, situated just before the Lesotho border, and Mthatha, in what was formerly known as the Transkei, is because of a pent-up demand and growing passing trade. It also appears that national retailers, who may perhaps have saturated the market in major centres, are now looking at outlying areas with potential.
Other property opportunities include Circus Triangle Shopping Centre in Mthatha, which is currently undergoing redevelopment and extension, with phase one of the project adding approximately 8000 square metres to the centre. Other retail centres are City Centre - also in Mthatha and which includes an office component, Ziyabuya Shopping Centre in Port Elizabeth, Equinox Mall in Jeffrey's Bay, Market Square in Grahamstown and Queenstown Mall and Peoples Place in Queenstown.
Capital, Fortress, Resilient, Vukile, Dipula, Arrowhead, Matlotlo, Khula, Intaba Investments and Nvest Properties make many of these investments. Matlotlo Property Fund portfolio has awarded a management contract for three office buildings in Queenstown, Mthatha and Butterworth to the company.
In the Port Elizabeth area, the company is currently seeing more positive economic sentiment. The local municipality has concluded a three-year office lease in Fidelity Centre in the CBD, bringing the space occupied up to 80% for government.
There is a very low vacancy rate in retail space in Port Elizabeth, including the Gelvandale and Kwamagxaki shopping centres. In the industrial property sector in Port Elizabeth, a 14,509 square metre property was sold to the existing tenant.
Coega is attracting business to the Eastern Cape region. Famous Brands are in the process of developing some 4000 square metres at Coega, while FAW Trucks are establishing a manufacturing operation.
East London is experiencing a demand for retail space in strip malls in the CBD. The trends noted in the East London market include a current higher demand for retail rather than office accommodation. There is an increase in small business development and incoming entrepreneurs seeking retail space, while national retailers are tending to seek smaller space than previously.
At present, there are opportunities to lease space at very competitive rentals in conveniently situated locations. While purpose-built premises may be best for operational requirements and more cost effective to run, the capital outlay involved can be prohibitive. In addition, vacant land, which is available for such development, is usually located out of town and further from national and main roads.
Conversely, premises which are available to rent are usually more centrally situated and, while large units are perhaps scarcer than smaller units, the rental rate is certainly more cost effective than building. This is combined with the advantage of repairs and property rates remaining the responsibility of the landlord.
Also in the Eastern Cape, in Buffalo Road on the outskirts of King Williams Town and about half an hour from East London, a 1444 square metre property ideal for a local manufacturer or warehousing operation has become available. Originally warehousing, converted to offices for the Department of Education, which has relocated to a new government-owned building, the property can easily be converted back to warehousing. Also available to let is office space in Queenstown, which is very suitable for a doctor's rooms, as it is adjacent to a pharmacy within the same building.
