Investors who own zoned land with available services have a head start if they plan to develop it, says JHI Real Estate executive chairman Les Weil.
Weil says there is "pressure" on zoned land in SA in spite of an abundance of space. "If you have zoned land that can be developed, you've got a good asset due to the time frames in getting land zoned for development."
Weil says the process can take up to two years.
He says that, increasingly, all segments of the market are competing simultaneously for location and this is compounded by delays in procuring economically viable "greenfield" land.
But owners of zoned land also have to ensure services such as electricity and water are in place and that there are access routes.
He says in Johannesburg office land can cost R700/m² to R2700/m², depending on location. Zoned land in Cape Town cost about R120/m² two years ago. It is now worth R400/m².
Given strong demand, reducing vacancies and the cash flows to make new leasehold developments feasible, rentals are likely to hit new highs, particularly for office and industrial space.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
