MAJOR PROPERTY UPSWING IN EAST LONDON

Posted On Thursday, 14 August 2003 02:00 Published by eProp Commercial Property News
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Strategically situated in the heart of the Border / Ciskei / Transkei region, East London - or Buffalo City - is becoming a major service centre of growing importance, a factor which has created a strong demand for both commercial and residential property in the area says Gwyn Bassingthwaighte who heads up the commercial property division of Pam Golding Properties East
London office.

Andrew Golding"Since Bisho was declared the capital of the Eastern Cape, East London's commercial and residential property markets have seen major spin-offs with many officials and legislative members choosing to reside in East London, and with many government offices taking up space in the city.

"This trend as had a ripple effect with other organisations who provide services to the government or work jointly with them on projects following suit, taking up leases which invariably extend for three to five years, giving landlords a secure income," he says.

Increasing tourism - including sports and eco-tourism, and both national and international conferences, coupled with the Coega and East London Industrial Development Zones (IDZ's), are seeing major investment in the region, creating opportunities for new entrepreneurs and those seeking employment.

Bassingthwaighte says the Buffalo City Municipality's active support for development and growth has created huge confidence in the area, which is further reinforced through major businesses such as Daimler Chrysler, Nestle, Coca Cola, da Gama Textiles, Johnson and Johnson, Castellano Beltrame, Moonlight Sweets, Marley Flooring, Lear Corporation, to name but a
few.

Daimler Chrysler in particular has proved a major catalyst for economic growth in the area, not only boosting its own production but attracting automotive suppliers and service providers to the city and resulting in the take-up of an enormous amount of warehouse / factory space on the West Bank as well as Arcadia, Braelyn, North End and Wilsonia.

"The demand for office space is ongoing. Over the past six years some 32 000sqm of A grade office space has been built and taken up, while approximately 3 000sqm of new A grade office space is currently being constructed or has recently been completed near Beacon Retail Park.  A high percentage of existing B and C grade space has also been filled, both in the East London CBD and elsewhere.

"Warehouse or factory space is also in demand with a shortage of large space from 1 000 - 5 000sqm plus.  

The only space of significance available is in nearby Fort Jackson, Berlin and Dimbaza, and there is some vacant land available on the West Bank and in Wilsonia.  As a result, the IDZ is to
provide vacant land for new development. The cost of constructing new buildings will in turn create an upward pressure on rentals of existing buildings," he adds.

Bassingthwaighte says retail space is in short supply across all areas of the CBD to Vincent, Beacon Bay and Gonubie.  Suburban shopping centres throughout the city are extremely busy with rentals firming in the older and more established centres.  Smaller such developments will continue taking place as the suburbs expand and new housing developments are launched.

He adds:  "Another factor with a major impact on the commercial property market in East London is Fort Hare, which is expected to increase its student intake to 15 000 students in the next five to 10 years.  As the students occupy more and more space - such as flats - existing tenants will
exert further upward pressure on flat and house rentals. 

Already Fort Hare is impacting on the commercial property market in the CBD and lower Quigney
for academic purposes, as well as the residential property market in the
Quigney and Southernwood areas."

Hanlie Bassingthwaighte, who is principal of Pam Golding Properties' residential franchise office in East London, says the demand for homes has increased across the board and that the buoyant conditions will continue, putting increasing pressure on the market, particularly for the construction of new homes.

"The strongest demand is currently for houses in the price range R350 000 to R700 000, while there is also a big demand for residential developments priced between R500 000 and R1 million in Nahoon, Beacon Bay and the surrounding areas, and in the R400 000 price range in Dorchester Heights, Nahoon Valley Park, Gonubie and surrounds.  There is also a strong demand for lower income housing in Wilsonia and nearby areas.

"On the east and west coasts there is a steady increase in demand for coastal properties not only for leisure but for primary residences - from both upcountry and international buyers, while enquiries for farms and smallholdings are also on the increase," she adds.

Last modified on Thursday, 26 June 2014 18:35

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