By Madden Cole

A hammer price of R70m for an office block in Sandton achieved at the auction held by Alliance Group on Tuesday again proved that the commercial property market remains strong in spite of the higher cost of money.

Nearly 30 lots were on offer at the sale held in the Park Hyatt Hotel, Rosebank, Johannesburg, with buyers coming from as far afield as Dubai, London and Norway.

"We're seeing just as much interest now, notwithstanding higher interest rates, than we did before," Norman Raad of Alliance Group said.

"Demand remains huge for attractive properties, which are also attracting international buyers. There is still the aggressive buying, especially for exceptional properties which are realising good prices. It seems that the market has discounted the increased rates."

The big attraction at the auction was undoubtedly the office block, with a gross lettable area of 6260m?, at 88 Grayston Drive, Sandown, in Sandton. The building brings in a gross income of R7,4m a year. It was what everyone came for, including the international buyers, if not to buy then to enjoy the excitement of the bidding.

"The building is in the wealthiest square kilometre on the African continent, if not in the southern hemisphere," auctioneer Rael Levitt said.

"Rentals in this area are heading north, and buildings like this one are as scarce as hen's teeth. They simply are not being traded."

An opening bid of R40m set the ball rolling, and bids of R5m at a time pushed up the final bid to R70m.

"The building achieved an unbelievable price, and based on currrent income, it was sold for a 6,5% yield," Raad said.

Another big-ticket number was a retail and office centre in Midrand. The building, on the Old Pretoria Road, has a gross lettable area of 12570m? and a gross income of R9,56m a year.

"This one will go for R40m," one of the buyers told his colleague before the bidding started. His prediction was remarkably accurate ? the hammer price was R41m.

Hillbrow was in the spotlight with four apartment blocks coming under the hammer. The buildings are at 23 Goldreich Street (R1,95m); 14 Goldreich Street (R2,1m); 14 Yetta Street (R2,3m); and 26 Bruce Street (R2,35m).

Six sectional title units in two office buildings in an office park in Bassonia Rock described "as the Sandton of the south" sold for R7,6m. The units have a combined gross lettable area of 2047m? and a gross income of R1,51m a year.

Development land of 9,2ha, zoned for residential one and three, in Capital Park, Pretoria, sold for R15m.

Properties in Rosebank, Houghton and Bryanston attracted attention.

Dernasyl Court, a block of 28 apartments on Tyrwhitt Avenue, Rosebank, was sold and confirmed for R13,5m; 23 St Johns Road, consisting of four stands zoned for residential one, in Houghton, was sold and confirmed for R2,4m.

There was only one bidder for an 8619m? development stand in Vandia Grove, Bryanston, zoned for residential one, that fetched R4m.

A quaint c1920s building on 4th Avenue and 7th Street Melville, described as a landmark corner, fetched a hammer price of R4,6m. It has a gross lettable area of 482m? and a gross income of R833128 a year. Apparently one of the tenants, the owner of a barber's shop, has been there for 29 years.

Boarding houses seldom appear on auctions, but on Tuesday an impressive building consisting of two blocks was sold and confirmed in a liquidation sale for R3,5m. The property is in Geduld, a suburb of Springs and once the site of the old Geduld gold mines.

The boarding house offered some of the most competitive bidding at the auction and came on the market at the R3m mark.

Keen interest was shown in 27 sectional title units in a block of 30 one-bedroom flats on Lleyd Street, Joubert Park. The block, which earns a gross income of R594000 a year, was sold and confirmed for R3m.

Among other properties sold and confirmed at the drop of the hammer were a retail centre with a gross lettable area of 464m? in Kempton Park (R900 000); Horizon House, a commercial property with a gross lettable area of 1500m? on Republic Road in Bordeaux, Randburg (R7,8m); and a retail-service station complex on Main Road, Melville (R3,75m). The latter has a gross lettable area of 732m? and a gross income of R464640 a year. It is zoned for business one and residential one.

A neat retail and office building with a gross lettable area of 1598m? in Norwood sold for R5m. A two-level industrial building, belonging to a deceased estate, fetched R2,55m. The property, in Village Main, has a gross lettable area of 4000m? and a gross income of R264000 a year.

Business Day