Property owners in the close vicinity of the proposed Gautrain railway stations are sitting on hot assets, with prices rising by up to 25% in the past year.
The Mail & Guardian surveyed a number of real estate agents who operate in the Rosebank, Sandton, Midrand and Rhodesfield areas this week, the majority of whom were overwhelmingly positive that property prices were set to boom.
Construction for the Gautrain rapid rail link has recently begun, with preliminary construction taking place in Sandton and Rosebank, while design work is still taking place for the Marlboro and Park stations.
However, despite the early stage of the project, most real estate agents, business owners and residents are expecting positive spin-offs from the R21billion transport project.
Internationally, rapid rail networks have been a catalyst for property development in the retail, commercial and residential sectors.
Gavin Klarmann of commercial property consultancy Bradford McCormack says the Gautrain is fuelling interest in commercial property around the proposed station precincts, most notably in Rosebank, Sandton and Midrand. Large-scale refurbishment of existing office blocks and retail complexes is already under way in Rosebank.
Property consultants argue that this suburb is ideally positioned between the Sandton and Johannesburg business districts.
Trafalgar Property’s Neville Schafer says areas such as Rosebank are likely to see a lot more high-density residential development, adding that he was aware of a number of developers who were already looking at investing in the area. Rentals in Rosebank have increased by as much as 25%.
Denise Farber from Chas Everitt International says there is still a lot of uncertainty in the market regarding the impact of the Gautrain, but if young professionals who are likely to use the train are attracted to Rosebank, older residences may well make way for townhouse complexes.
Property prices in Rosebank have shown strong growth in the past two years and Faber says an old house that couldn’t be sold two years ago for R1million recently sold for R2,2million.
John Byrne of Homenet Select says the commuter culture that the Gautrain will bring will likely be the impetus that drives the Rosebank property market, particularly increasing demand for commercial property.
“I believe that impetus will come from the Gautrain, as a direct result of the rejuvenation of demand for office and residential space in the area, which will become a base for onward commuting to other destinations on the Gautrain network and, for that matter, a destination in itself,” says Byrne.
Leigh Nationlink’s Roy Leigh specialises in Sandton property and says that if the Gautrain takes off, properties near stations will likely see a big rise in value. He also says solving the congestion problems, which are getting worse by the day, will have a positive impact.
Another area that is set for large development is Rhodesfield, which will also have its own station. It is situated near OR Tambo Airport.
Barry Davies of Homenet Kempton Park says a lot of residential owners are selling off their land to property developers, who are converting the homes into commercial properties.
Davies says property prices in Rhodesfield have doubled in the past two years, and investors can expect prices to double again in some areas because of the demand driven by the Gautrain.
“A lot of people are waiting it out to see what’s going to happen,” says Davies.
Construction and engineering group Murray & Roberts, the South African construction partner for the Gautrain project, announced this week that its order book had increased to R16,5billion as of September 30. This is largely owing to an increasing reservoir of projects that include the Gautrain and 31 new locomotives for Spoornet’s Orex Rail System.
Word on the street
Most business owners positioned near the sites of proposed Gautrain stations are expecting positive spin-offs for their businesses.
Andre Harrison, the manager of the Engen petrol station on the corner of Bolton and Oxford roads in Rosebank, says the value of the station’s property has gone through the roof. He has also seen a 10% increase in diesel sales since Gautrain construction began on Oxford Road and all the construction workers are buying lunch from his store.
Willie Rapp (below), the manager of the Shell petrol station across the road, says he expects his stations to benefit but is concerned that they may have delivery problems owing to the road blockages.
Gareth (declined to give his surname), the owner of the new Doppio Zero eatery that opened four weeks ago in Rosebank, says his decision to open in Rosebank was driven purely by the Gautrain. He is counting on the pedestrian culture created by the Gautrain to boost business in the area and expects property prices to increase drastically.
He will use the Gautrain if he has to go to a business meeting in Sandton, but not for his daily commute. He hopes it will be affordable so that his staff, who are mostly based in Hillbrow, can use it to get to work.
Mike Horowitz, the owner of Sandton Sound, which is situated across the road from the proposed Sandton station, says he is expecting a lot more business. He hopes people will come and drop their cars off for him to work on while they catch the train to work. “It seems like a great idea,” he says. “But for the average South African it’s a shit idea. How is this going to help the worker who lives in Soweto?”
Horowitz says the traffic and the taxis were causing massive problems in Sandton and it took him 45 minutes to travel the 1km from his store to Village Walk shopping centre this week.
Matt Nelson (right), who runs Digi Dynamic print shop opposite the proposed Sandton station, says despite the entrance to his car park being blocked off for two weeks, there has been minimal impact from the construction taking place. He is expecting positive spin-offs for his business from the pedestrians that will be in Sandton, and he plans to use the Gautrain to commute from Pretoria to work and back.
Nelson says the taxi drivers, who keep parking on the traffic islands now that they can’t spill over from the taxi rank into the Sandton library parking lot, are causing a massive problem. “The cops come and chase them away and they are back within an hour,” he says.
Mavela Makhanya (top right), a taxi driver, says the route changes are causing a lot of havoc for the taxi drivers and the fact that they can no longer use the Sandton library car park is causing congestion problems. He does not view the Gautrain as a threat to the taxi industry, because the prices will be too expensive. One of his colleagues was animatedly jumping up and down, shouting at the top of his voice that he hopes the Gautrain is very expensive.
Togo Rampo (above), who runs a food stall at the Sandton taxi rank, says they have been told that the rank will be relocated, but they do not know where to.
Another woman from a neighboring food stall says she heard that they were being moved up the road, but that the new rank will be half the size of the current one. “Shilowa is abusing us,” she says. — Lloyd Gedye