“In a month-long process we attracted offers from a number of listed funds and private investors,” says Norman Raad, CEO of Broll Auctions and Sales. A due diligence period of two to three months will follow for the successful purchaser/s.
“After a concerted marketing and property information process, we could not have asked for a better response. I cannot recall a sales process for a transaction of this scale to be so well-participated with so many interested parties submitting offers.”
Located in the heart of the city, the property comprises 10 buildings which are all currently let to Telkom until January 2019. Seven of buildings are set to become vacant in August of this year (2015) and by 2019, with the exception of one, all the buildings will be vacant.
“This makes them ideally suited for another government precinct, conversion to residential accommodation and new retail space spanning the two entire CBD blocks,” says Raad.
“This unprecedented opportunity - with such tremendous potential for redevelopment, will bring much needed upgrades and refurbishment to the area. On the back of this rejuvenation, many other properties will no doubt follow suit, with positive spin-offs for the CBD property market as adjacent and surrounding buildings are likely to enjoy a concomitant increase in value.
“In relative terms this investment opportunity is still cheap, and despite a number of local funds looking outside our borders, astute investors remain attracted to the value offering of CBD investments in South Africa, and have identified the value offering in the Pretoria CBD. The manner in which values and the demand for CBD real estate has increased over the years in tough economic environments illustrates their attractiveness.
“None of which would have been possible without the residential conversion partners who have demonstrated vision and innovation – converting underperforming office buildings into desirable residential accommodation, which has attracted new investment and breathed new life into central city locations. Investors in turn have benefited from rental income streams as new tenants have taken occupation, both from a residential and retail perspective.
“Underpinned by factors such as relatively low interest rates, a shortage in the supply of well-located residential accommodation, and the ongoing demand for good quality development opportunities, exciting times lie ahead in the property development sector,” concludes Raad.