The property market has cooled down, but interest remains strong as could be seen from the large attendance at the Alliance Group’s multi-property auction in Sandton on Wednesday.

“All in all I’m happy with the prices received, especially with the performance of the historical buildings in central Johannesburg. It shows that the property market is still good,” auctioneer Rael Levitt said after the sale.

There has been a downward adjustment in property prices, and the property yields have risen, driven by factors such as interest rate hikes and the illiquidity in the market, Norman Raad of the Alliance Group said.

“Demand for shopping centres, especially in country towns, remains strong.

“Vacant industrial property is much sought after and warehouse space is achieving prices of up to R2500/m²,” Raad said.

“Buildings in the Johannesburg inner city fetched good prices considering their condition. It shows that there are still a few guys wanting to get into the CBD market.

“However, there is no demand for vacant land at the moment as the power crisis has had a direct effect on development projects,” Raad said.

Willowbrook Flats on Atholl Oaklands Road, Melrose North, with a gross lettable area of 3421m², described by Levitt as “one of the most stunning properties” brought on the market in recent times, attracted brisk bidding after an opening bid of R22m, to close on a hammer price of R28m.

Top price at the auction was scooped by triple A+ Grade showrooms on William Nicol Drive, Bryanston. The building — with a gross lettable area of 3503m² on a 5571m² erf — fetched R31m after an opening bid of R20m.

Industrial premises in Tulisa Park, Steeldale, with a gross lettable area of 9514m², was sold and confirmed for R13m.

An interesting feature of the auction was the number of shopping centres in country towns that came under the hammer. A high street retail centre in Witbank, with Morkels as the main tenant, achieved a knockdown price of R4,25m. The centre has a gross lettable area of 1505m² and a gross income of R541 581 a year.

More was paid for a retail centre on Fichardt Street, Sasolburg. The 5721m² centre with a gross income of R2,05m a year, is fully let to national tenants. It fetched R14,5m.

Another retail centre with a blue-chip tenant, was the Mr Price complex off the N4 highway in Nelspruit. The 1628m² centre with a gross income of R1,47m a year achieved a knockdown price of R11,25m.

A well-positioned retail

An industrial warehouse in Klerksdorp with Mass Store as tenant achieved a hammer price of R1,65m. Gross lettable area is 1715m² and gross income totals R212 738m a year.

There was keen demand for five residential blocks in central Johannesburg.

Renate Mansions at 52 Plein Street, offering retail and flats, sold for R4,75m. The fully let Edinburgh Court on Jeppe Street went for R5,5m. The gross lettable area of 2606m² includes 34 flats and Charlie Parkers as a retail tenant. Gross income is R943080 a year.

Strathearn Mansions on Bree Street, also with Charlie Parkers as tenant, fetched R6m. Gross income is R931672 a year.

The hammer price for Ashbern Mansions and adjoining Moravia Court was R4,5m. It has Barnetts as tenant and earns R726720 a year.

The cherry on the top was Queens Court, a retail and apartment block on Bree and Klein streets. The fully renovated building with a gross lettable area of 2357m² and a gross income of R2,85m a year recorded a knockdown price of R17,5m, the fourth-highest price fetched at the auction.

The only one-horse race at the auction was an industrial warehouse in Lyttelton Manor, Centurion. The warehouse, with a gross lettable area of 7111m² and a gross income of R3,47m a year, attracted an opening and final bid of R20m.

Source: Business Day