Listed property fund Vukile recently reported a strong uptake of space in its landmark Randburg Square shopping centre and office tower (the old high-rise Sanlam Centre).
Vukile CEO Gerhard van Zyl says at the beginning of the year more than 70% of Randburg Square's office space stood empty. By end-2006, vacancies had dropped to below 10%.

Van Zyl says as office space in prime business nodes such as Sandton becomes scarcer, tenants are likely to turn increasingly to secondary nodes such as Randburg.

Astute investors are wasting no time to cash in on the trend by buying and upgrading older office blocks in the Randburg area. Black-owned African Capital Property Portfolio, a new unlisted fund chaired by Zwelakhe Sisulu, is one such investor. Last month the fund bought four commercial properties for close to R80m in the Randburg area: three office blocks and an industrial property. The four Randburg buildings are African Capital's first acquisitions. JSE-listed CBS Property Portfolio has a 45% equity interest in African Capital.

African Capital MD Jacques van der Heyde says the fund's initial strategy is to focus on acquiring primarily office blocks valued at between R20m and R100m. He says the company would also consider mid-market opportunities in the industrial and retail sectors, specifically small community-based retail centres.

The Randburg properties bought by African Capital include the Motown motor retail warehouse, the double-storey office building Dover House and office blocks in Harley Street and Palm Grove.

Latest figures from the SA Property Owners' Association confirm that the Randburg CBD is showing a reversal of fortunes. A- and B-grade office vacancies nearly halved - from 13% to 7% - in the two years to end-December 2006.

Industry commentators say that office-to-flat conversions are also starting to take off in Randburg's CBD as an influx of office workers is driving additional demand for middle-income housing.