A portfolio of investment properties valued at nearly R40m in Gautengand Western Cape will be for sale at two auctions to be held by Aucor thismonth.

The auctions for the Gauteng properties will be held at the Inanda Clubon June 8, and the Western Cape properties at the Forum, V&A WaterfrontHotel, on June 14. They form part of a rationalisation exercise by Sanlam,owner of the properties.

"As far as property is concerned, Sanlam is really in the big league,with individual property values running into billions rather than millions,"says James Dall, CE of Aucor's property division. "So these propertiescoming on the market do not fit their portfolio requirements."

Three of the buildings are in Sandton. The landscaped office node inWierda Road West is described as prestigious and well tenanted. Other buildingson offer in Sandton are a modern office block in Epsom Downs, off WilliamNicol Drive, Bryanston, and a "motor city" of 14 retail outlets in RautenbachStreet.

Dall says Sandton remains a desirable area. "There has been a bit ofa surplus of commercial space in the past few years, but this is turningaround now. As an office node the area will remain in demand, being closeto popular residential areas."

However, the area off William Nicol Drive in Bryanston is the placeto be these days. "Office complexes in the area are much sought after."

The Rosebank property for sale, on the corner of Jan Smuts and TyrwhittAvenues and known as Cargo Corner, will come under the hammer as well.The lessee is Mercedes-Benz franchise owner Sandown Motors.

"Although the building needs some attention, it is an excellent opportunityfor a buyer to revamp. This type of property is very competitive becauseit is versatile and can be viable at rentals as low as R20/m²," Dallsays. "But it depends on how much is spent on the upgrading. However, ifone considers that rentals of some buildings in the vicinity are as highas R60/m², then at less than half that rental, there should be noshortage of tenants.

"There is still strong demand for buildings in parts of Rosebank, sothe new landlords could look at a return of between 16% and 17% on theirmoney."

The buildings coming on auction are more in line with the demands ofthe present-day developer, Dall says.

"The trend is more to lowerrise buildings, two to three storeys whichthese buildings are, rather than skyscrapers. It does away with lift maintenance,air conditioning and their outlay costs. Accordingly, such properties aremore viable and hence more sought after."

In Braamfontein, a corporate office block in what is described as "theelite northern sector" is up for sale. Demand in the "elite sector" remainsstrong, especially for colleges that want extra space. The suburb formspart of the Johannesburg City Council's multibillion-rand urban regenerationprogramme.

There was once a surfeit of factory space at low rentals, says Dall,but that is no longer so.

The situation has changed significantly in the past two years aftera surge in demand. "Vacancies have reduced dramatically and most of theslack has been taken up. This makes factory buildings a good proposition."

Aucor is offering two such buildings, a factory-warehouse and distributionwarehouse, in Boksburg and Wadeville respectively. "The Boksburg buildingis a good opportunity. It is huge, more than 9000m² in size, and canbe bought for a reasonable price. It is ideally situated between the N12and N17 freeways."

The Western Cape properties to be auctioned on June 14 are a supermarketin Malmesbury, a shop and offices complex in Bellville and a building inWynberg that houses two government departments.

"Growth from commercial and industrial properties are good, and manyof these properties can be bought for less than replacement value." Dallsays prospective buyers will be doing their research before the sale, andthere should be keen bidding among the serious buyers.

"So the properties will sell for what the buyer is prepared to pay andnot what the seller wants, which is an excellent free-market system. Iexpect the Gauteng sale to realise a total turnover of between R30m andR40m."

Business Day