Jhb CBD call centre sold for R97m

A 27,000sqm call centre in the Joburg CBD has been sold, through a negotiated deal, for R97,5m. The seven-storey facility situated at Laub Street was sold on behalf of a major retailer and was snapped up by City Properties, a listed property fund managed by property doyen Alec Wapnick. The property was sold with a ten year triple-nett Edcon lease in place and in effect is a sale and leaseback transaction.

According to Norman Raad, who heads up Alliance Commercial, the sale is a big boost in the arm for the commercial property market as well as downtown Johannesburg.

On the same day as the large retail sale, Alliance Group conducted an auction where it achieved the biggest result in the commercial auction market in the last 10 months.

Although the Group's annual June sale is a small sale in number, the average lot size on the day was R5,5m. The largest lot was an industrial property in Alrode, which sold for R12,5m, reflecting a yield of 14,4%.

A further five properties were sold for over R2m, undermining the perception that larger lots were more difficult to sell. This was further emphasised by an office block in Centurion which sold for R6,4m, reflecting a projected net yield of 12,1%. A block of 35 flats in Rosettenville was sold for R6,9m, indicating that there is renewed demand for apartment blocks.

"The hunt for quality is stronger than it has ever been. We had around a dozen lots where there were 15-20 parties trying to outbid each other. As there can only be one winner, there is a lot of unsatisfied demand in the market for lots which offer good quality long-term income. The pricing for the high quality lots remains firm and the battle for these investments was marked. Holding cash in a low interest environment is at present an unattractive option," says Raad.

"The perceived weakness in the market is in demand for properties with uncertain tenant covenant, poorer location or shorter lease length. The yield on these properties softens very quickly, and as a consequence we were left with a few such properties at the end of the day. Although the cash in the market is considerable, buyers are selective."

Sellers on the day included liquidators, public companies and listed property funds

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