Sandton borders on Grayston Drive in the North and West, Sandton Drive in the South with Wierda Road and Daisy Street, as a periphery in the East. Since the movement of the JSE from Johannesburg central into the node in 2001 and the relocation of several other blue chip tenants, Sandton has established itself as the financial centre of sub Saharan Africa.

The Sandton node attracts corporates predominantly within the legal and financial sectors. One of South Africa’s biggest banks, Nedbank, is located on 135 Rivonia Road and another prominent financial institution is Rand Merchant Bank situated on Fredman Drive and Rivonia Road. The Sandton district is also home to the country’s leading law firms, all situated within Sandton central. It is also characterised by one of the biggest super-regional shopping centre in the country, the Sandton City.

The addition of the Sandton Gautrain station has increased accessibility into the area and has complimented the other existing available transport modes such as the Metro buses, Putco buses and mini bus taxis that service the area. Overall, the area offers a mixed use of office, hotel, residential and retail space. The presence of a Sandton Gautrain station has increased the area’s popularity and fuelled development particularly around the station’s precinct.

Market Overview
Sandton has a total gross lettable area of approximately 1,485,000m² of which 48% are A Grade offices, with premium office buildings constituting only 16% of this total. A shortage of premium space in the node has resulted in increased demand for Prime office space in Sandton, this resulting in achievable rentals of between R170.00/m² to R185.00/m². Gross rentals for Grade A buildings have remained stable in 2012 and currently average R153/m².

There were two noteworthy prime developments that were completed in the past year, the Cliff Dekker building with 16,000m² of office space and the 36,000m² Alexander Forbes development. At present there are 83,000m² of committed developments, with 46% being tenant driven. Current developments include the Athol Tower building for 10,000m² due for completion in mid-2013, a 17,000m² Alice Lane building due for completion in Q3 2013 as well as the Ernst and Young development for 30,000m² due for completion in late 2013.

Overall vacancies in the Sandton node have reduced over the past year, from 9.3% in Q4 2011 to 8.6% in Q4 2012, this despite the recent q/q increase in vacancies in the current quarter due to the relocation of Alexander Forbes to the newly developed 36,000 building, leaving the 26,000m² old buildings vacant. Overall vacancies in this node are lower than the national and overall Johannesburg vacancies, currently both at 10.6%.

Sandton remains a sought after area offering tenants and property owners a prime corporate address and prominent company image. In the midst of the prevailing subdued economic environment, Sandton is one the premier nodes that continues to yield demand, attaining lower vacancies, increased committed developments and improved rental performance.

It is anticipated that gross rentals for Grade P and A office buildings will increase further in the next twelve months as Corporate occupiers pursue quality buildings in a prime location with essential amenities.

Source: Jones Lang LaSalle