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Nov 08, 2006:
Record attendance at a recent Cape Town property auction indicates that the market is set to continue the steady growth shown so far this year.
The commercial and industrial property market is set to continue the steady growth it has shown this year regardless of the interest rate hike, feels Jonathan Smiedt, CEO of the ClareMart Auction Group. Smiedt explains "2006 has shown continued growth with investors favouring commercial and industrial property. We expect this interest to remain unchanged for the last quarter of the year."
Speaking after the success of their latest multiple commercial and investment property auction held at the Mount Nelson Hotel at the end of October, Smiedt adds: "The record attendance figures at our last auction, shows that the market is buoyant".
Smiedt admits that the interest rate increase is reducing margins but; "This does not mean that sellers can't expect healthy returns: all it means is that the asking prices should be more realistic".
Of the twenty-four properties knocked down at the October event, Smiedt highlights some that he believes to be sound investments. A shopping centre in Parklands attracted some serious interest and bidding and was knocked down for over R10 million. Parklands has showed steady growth in commercial and specifically retail properties and according to Smiedt this property is the second shopping and retail centre the ClareMart Auction Group has knocked down in less than a month.
Development sites in the Northern Suburbs also came under the ClareMart hammer and a prime portion of the well-known Meerendal Farm on the Vissershok Road in Durbanville was knocked down for R3.2 million. "The site potentially has higher medium to long term value. At some time in the future the urban edge will reach this location and when this happens the owner would be sitting on a 'gold mine' with development or subdivision opportunities becoming available" says Smiedt.
Another trend Smiedt highlights is developers buying apartment blocks for redevelopment. "First prize for a residential developer is still an apartment block or complex. It makes for an easy renovation and often high profit margins" adds Smiedt. In Plumstead, Le Carby Court in 93 Main Road, a sectionalized block comprising four apartments, two garages and three storerooms was sold at auction for R2.6 million.
Smiedt and his team are already promising an exciting property portfolio for their November auction and are expecting a full house once again. The multiple commercial property auction is to be held on Wednesday 29 November 2006 at 12:00 at the Mount Nelson Hotel.
