Demand for towers soars as South Africans embrace high life

Nedbank Corporate Property Finance Gauteng’s regional executive, Ken Reynolds says office and retail developments in Sandton and Rosebank, are creating higher demand for high-rise executive living in the vicinity.

The shift to high-rise apartment living has accelerated with developers responding to the growing demand from South Africans for vertical villages and super-tall residential towers.

This year is expected to be a busy one for developers as demand for luxury residential apartments in Johannesburg's upmarket suburbs of Sandton, Rosebank and Hyde Park continues its steady rise.

This is alongside new developments and upgrades in the business and retail sectors in the area, says Nedbank Corporate Property Finance Gauteng’s regional executive, Ken Reynolds.

Reynolds says an office vacancy survey for the fourth quarter shows almost half of the office development taking place in SA is in Sandton.

The area continues to be a hive of activity, with both Discovery and Sasol developing their head offices in Sandton central, adding more than 150,000m² of office space.

After a turbulent 2013 the prime office market is starting to turn the corner and Sandton’s retail property sector is also showing signs of picking up, with R450m spent on Sandton City’s new Diamond Walk alone.

Reynolds says the new developments are creating higher demand for high-rise executive living in the vicinity, as people who work in the area increasingly desire to live close to where they work and play.

Five years ago the going rate for upmarket sectional-title units in Sandton averaged R25,000/m² to R35,000/m². Now, off-plan sales of luxury apartments regularly fetch rates exceeding R40,000/m² and are rising fast.

Though attention needs to be paid to Sandton’s transport infrastructure, he says, “advancements in public transport such as the Gautrain service and the Rea Vaya bus service continue to ease the negative impact. Additional living space in the vicinity will, in fact, alleviate traffic as fewer commuters need to use the congested feed-in routes.”

He says a similar trend is emerging in Rosebank, which houses the third-largest high-rise business centre after Sandton Central and the inner city. Over the past three years close to R7bn has been spent on developing new offices and refurbishing legacy commercial buildings in the area. Neighbouring Dunkeld is seeing similar development.

“So, while Cape Town has long (been acclaimed) as the luxurious residential property mecca of SA, exciting developments around Johannesburg’s newer upmarket business and residential areas suggest that the city — as the prime gross domestic product generator in the country and on the continent — is adapting with agility to the demand for highend residential property.”

SA’s second-largest property group, Redefine Properties, recently launched a luxury high-rise residential apartment block in Rosebank with 445 apartments, while The Capital on Bath, by the Capital Hotel Group, will add 52 apartments and 100 hotel rooms to the area.