Demand for precinct and lifestyle living is seeing an increase in the number of new commercial and residential property developments in select areas in the City of Tshwane in Gauteng.
“The way people live, work and play has changed – more people are moving into secure spaces for lifestyle purposes, and developers are capitalising on this need for convenience and security,” says Ilma Brink, Pam Golding Properties Pretoria regional development sales and commercial property manager.
Property developers remain optimistic about the city’s prospects and continue to identify opportunities for developments, especially in Pretoria East. Brink says the trend towards “precinct development” has seen five commercial and residential developments come onto the market in Pretoria since 2016. These include The Club precinct in Hazelwood, the Six Fountains Residential Estate in Pretoria East, the Menlyn Maine precinct, the Loftus Park precinct, and the recently launched Atterbury’s Castle Gate next to the R21, currently under construction.
Within the region, Pretoria East which is conveniently located close to highways and major roads, accounts for the bulk of developments currently underway, or in the planning stages.
Growth in lifestyle apartment living
Brink explains that large residential stands measuring between 1 000m2 to 2 000m2 in size are being bought up in areas such as Waterkloof, Menlo Park and Menlyn and rezoned for lifestyle apartments of between 10 to 35 units. In the outer areas of Pretoria East, large pockets of land, previously zoned for agriculture, are now being converted into lifestyle estates. In addition, developers are snapping up available land in Irene, thanks to its convenient location next to the R21, and proximity to both the Pretoria CBD and the O.R Tambo International Airport. Developments in Pretoria North to Soshanguve target the large Government subsidised buyers with huge success.
Pam Golding Properties is currently marketing approximately 22 developments in Pretoria, including the ground breaking Trilogy Collection lifestyle apartments located at Menlyn Maine – the first mixed-use precinct in Pretoria, and also Africa’s first green city in the making.
Brink says buyers of these lifestyle apartments include investors and primary residents who are upscaling and downscaling, as well as consortiums consisting of entry level buyers pooling together their resources. “We are seeing a new trend in buying these apartments as secondary residences, and in our experience, successful developments offer a mix of studio, one bedroom, two bedroom units, and especially three bedroom units.”
She says these apartments have different value offerings. Trilogy Collection, for example, is a mixed-use precinct that enables residents to live, work and play in the same space. Roundabout Brooklyn, is Pretoria’s first pet-friendly apartment building that creates a healthy harmony between residents and their pets. “Each of these developments target convenience, lifestyle and security – key factors for many homebuyers nowadays.”
Property prices charged
Prices of these lifestyles apartments start from just over R1 million for studio units and up to R20 million for exclusive penthouse apartments at Trilogy Collection, with approximately 6% on investment returns.
However, property location plays a major role in determining the sale price. Properties close to main access routes in areas such as Menlyn, Brooklyn and Waterkloof are perceived to be trendy, and will command high prices. “Demand for residential apartments in more “suburban areas” is lower than in core areas that offer convenience, hence this impacts on the rates charged per square metre,” says Brink.
In Menlyn Maine, square metre rates are high not because of location, but because the developer has provided a range of value-adds. The precinct is not only green but offers amenities including a 4 000m2 park with designer sculptures, viewing decks, walking trails, water features and recreational facilities, a private rooftop swimming pool and a garden terrace complete with a sunset bar, as well as concierge reception, secure parking, private meeting rooms, children’s day care, staff rooms and store rooms. There will also be dedicated cycling lanes throughout, and a number of lock-up facilities for bicycles. In addition, there are prime offices and a boutique mall, while the proximity to the Sun International Times Square Casino and Arena makes this an appealing precinct, according to Brink.
Castle Gate is following this value-add trend offering 1 100 residential units, a hotel, 100 000m2 of prime office space, 40 000m2 of specialist medical facilities, 23 000m2 of convenience retail and 8ha of protected green areas that will incorporate walking and running trails.
Commercial precincts developments
According to Raoul de Villiers, Atterbury development manager, precinct development is currently a preference for buyers and users of space, and developments such as Castle Gate will meet this growing demand for a convenient lifestyle. “As property developers, we take a long-term view on all our investments, we are confident about South Africa’s future, and proud to invest in this city, and particularly, in a key growth node such as Castle Gate.”
De Villiers points out that very few precincts are being developed hence they are in demand, pointing out that similar developments include Lynwood Bridge, The Club, The Village, Brooklyn, Hatfield and Pretoria CBD.
Companies are also changing the way they work, and to meet business objectives, some consolidate their various offices and move to one central location. While some businesses expand and require new bigger office spaces, others are moving into a smaller and more efficient spaces to cut down on costs, according to De Villiers.
“The Fourth Industrial Revolution is no doubt changing the way people live, work and play. We will continue to see companies looking to move their operations into centralised locations, and precincts such as Castle Gate offering sought after, new, efficient and green buildings” says De Villiers.
Although there are some spec developments in Menlyn Maine, Atterbury’s developments are tenant-driven and built to meet tenants’ needs. He points out in these new developments, tenants are demanding green features, which from an investment perspective makes sense for a building to have a green star rating. Excluding land costs, development costs vary, ranging between R25 000/m2 to R35 000/m2, he says.
Brink explains that Pam Golding Properties embraces the precinct and mixed-use developments such as Menlyn Maine - the first mixed-use precinct in Pretoria, and Africa’s first green city in the making. There is a residential, retail and office component within this precinct. Pam Golding Properties are marketing prime offices including Park Lane West at Central Square, Abland’s Menlyn Central and in the Waterkloof Ridge area, Atterbury’s Castle Gate, a new mixed-use precinct offering office space, retail and residential units.
New offices located within lifestyle and precinct developments offer the right address for medium to large businesses looking for convenience. Net rentals generally range between R145/m2 to R170/m2, says Brink.
According to Solet Viviers, leasing manager at Atterbury, gross rentals for new prime grade offices range between R210/m2 to R250/m2, with annual escalations of between 7.5% and 8%. P-grade gross rentals at Castle Gate will range from R215/m2.
She says most companies are now moving to precinct developments because of easy access to major roads and highways and the convenience of having all services in one place.
“Convenience remains a key driver for new office developments and this trend is expected to continue for the next few years,” adds Viviers.