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Rivonia and Sunninghill Suburb Profile

Posted On Friday, 01 March 2013 05:26 Published by eProp@News
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Rivonia has had significant roles to play in Johannesburg’s history, variously as a farming area, mink & manure belt, to upmarket suburban area, to commercial property node. Together with its junior partner Sunninghill, Rivonia has become known as something of an IT hub with promising rentals for property investors.

Sunninghill, considered to be both commercial and residential, is bordered by what used to be Johannesburg’s outlying suburbs of Kyalami and Woodmead, now commercial nodes in their own right. Once open land is now occupied by residential complexes and businesses.  The N1 forms Sunninghill’s southern boundary with access via the Rivonia off-ramp.

Sunninghill has a large concentration of offices, mainly in the form of office parks, including Sunninghill Office Park, Unisys Park, The Crescent and Ariel Office Park. A growing residential demand and anInadequate road infrastructure has been the biggest disadvantage for the development of the node, with Witkoppen Road and Rivonia Road suffering from severe traffic congestion. Significantly the new K60 has been laid out through the centre of the suburb. This should assist enormously.

Buses and minibus taxis provide public transport on the main arterials. Further road upgrading is underway, and continues to be necessary. Pedestrian connections between offices and shopping facilities have been planned, though continuous pedestrian linkages are still lacking.  A number of high-density residential developments are emerging in the node.The node has limited social and community facilities. One of Johannesburg’s better hospitals, Netcare group’s Sunninghill Hospital is located in the area. There are also a number of religious facilities, pre-schools and a post office

Rivonia lies between the Braamfontein Spruit and the Sandspruit, and was the location of Liliesleaf Farm, where in 1963 many of the accused in the notorious Rivonia Treason Trial were arrested. A Carmelite Convent, accommodating Carmelite Nuns, sat in the centre of the village until displaced by commercial pressures.  In a commemorative move, the large shopping centre first built on the site was named The Cloisters.The main retail thoroughfare in the area, Rivonia Boulevard, is the location of several shopping complexes as well as many other shops and restaurants.

Rivonia and Sunninghill are lumped together by brokers and others in the real estate business for practical reasons. They have much in common both being outlying suburbs of Sandton, and intermeshed with each other’s economies. Together they are considered an IT hub. For example,Hewlett Packard's main Southern Africa and South Africa offices are located here as is the registered office of Fujitsu South Africa. Companies located in Sunninghill include Acer, Eskom, PriceWaterhouseCoopers, CA, AstraZeneca, RCI and Unisys.

Primary shopping centres in Sunninghill include Chilli Lane, comprising better known retailers such as Woolworths, Pick 'n Pay and a Virgin Active gym; The Coreincluding offices and restaurant retailers; Sunninghill Shopping Centre comprising speciality restaurants and retailers Spar and Woolworths. Low rentals and good value in Sunninghill resulted in a number of large users taking up space in 2012. The area continues to be popular with small to medium businesses.

Recently a few modern individual buildings have been developed. Refurbishment of older office parks and buildings continues. Most notable would be 345 Rivonia Boulevard,Tuscany Office Park, Homestead Office Park and Bentley Office Park. Theneed for office space is on-going, mostly  from private, medium-sized businesses and owner-occupiers. As these businesses grow, they will require more space.

According to Broll Research a peak of R125sqm gross was reached for rentals of prime-grade offices back in 2008.However as 2009 hit, rentals began to drop to R115sqm before making an upward movement. Prime-grade gross rentals are now looking fixed at R125sqm. Average rentals for A-grade offices are between R85 and R100sqm gross. Vacancies are fluctuating due to disruptive road-works on the main thoroughfare - Rivonia Road.

So as things stand demand remains steady to flat as do sales and supply. The space that reports to be in demand is from 150-1000sqm; Cap rate 9-10%; Lease escalation 9-10 % and Operation cost escalation is pegged at 10-11%. 

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