Prime Durban CBD building nets R100m at auction
08 August 2018 | Web Article Number: ME201811096
THE sale for just under R100-million of the Absa building in Anton Lembede Street in the Durban city centre will bring a much-needed boost to the inner-city commercial property market.
That’s according to Broll Auctions and Sales CEO Norman Raad who described it as a “trophy property” and revealed that it was bought by a local investor “who is now the proud owner of one of the best realty opportunities in Durban”.
He predicted that the sale would “bring positivity to the Durban CBD, with changes and improvements expected to follow”.
He said that in the current market, confirmed sales provide the trigger which generates further positive outcomes. “Albeit at prices somewhat less than expected, it reinforces reality and creates contagion across buyers, sellers and the entire market.
“This is our experience, emphatically so at our most recent auction which attracted strong interest from buyers, with the bidding process unlocking the true potential of the property values. And the auction platform still provides the fastest solution to monetise properties.”
Raad said this and a number of other recent sales underlined the ongoing demand for quality properties in major centres in the country. However, they had also served as a true reflection of the market, with the prices achieved considerably lower than where the market was a few years ago.
“Besides the worsening market and economic conditions, one of the obvious reasons for the slump in these property prices is the expropriation of land issue, which is having a major negative impact on buyers and market sentiment, as no one really knows what the outcome is going to be.
“The wait for some clarity and certainty is creating anxiety in an already depressed market. In the interim, trying to evict illegal occupiers from your property is proving to be costly and even more challenging.
“Positively however, if South Africa is your home, then investing in bricks and mortar is the perfect hedge through this difficult and inflationary period. Property has always proven to be a good investment over time, just ensure you have a purpose for the building or land and that it doesn’t remain vacant,” Raad said.
“Smart investors know that this is the time when one has the potential to make money, as wealth is and can be made in the most difficult periods. Hopefully, the banks will play their part in providing finance and we will enjoy stable interest rates for the next period.”