Due to strong demand for commercial space at Melrose Arch, sectional title offices of 6,500m² are to be developed at the popular mixed-use precinct at a cost of about R100m.

Nicholas Stopforth, development manager of the Melrose Arch Development Company, says the sectional title offices at One Melrose Boulevard will range in size from 100m² to 500m², and be suited to small and medium businesses wishing to own their own space rather than lease it.

Melrose Arch has massive development potential with the whole basket of development rights covering 315,100m².

A long-term plan covering hotel, retail, residential, commercial and entertainment developments is planned at the precinct.

Stopforth says they have had inquiries from small users such as doctors and physiotherapists to big companies wanting space.

"It's the new urban trend. We are trying to create a new urban environment where people can live and work," he says.

Stopforth says they want to encourage owner-occupiers to come in, take space and be part of the mixed-use environment.

Paul Barrow of Barrow Properties, which is developing the sectional title offices, says the development will consist of 26 units.

Barrow says the low interest rate environment is encouraging people to own their units rather than lease.

People are asking why they should pay rent when they could buy and use their money for bond repayments.

Construction will begin this month and the development will be completed by the end of next year. The first phase of sales will be launched this month and prices are expected to start at R15,000/m².

First South Securities property analyst Leon Allison says the worst is behind the overall office sector and "things should start improving from here on out".

There has been an oversupply in decentralised office nodes in SA for some years because of major overdevelopment on a speculation basis. However, the office market has been gradually improving with vacant space being mopped up.

Allison says there are certain office nodes which have been experiencing an increase in rentals, whereas in other office nodes rentals have not moved up or down.

He says that Melrose Arch seems to be a node where there is demand for office space.

"And of course it will also help once there are more residential apartments in that node."

Allison says that many people prefer to live close to work.

"It's the same thing you are seeing at Century City, where there are definite synergies to office, retail and residential developments," he says.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge