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February 14, 2018

Midrand Is The Hot New Space For Commercial Property

We look at how Midrand became one of the most sought-after neighbourhoods

Situated halfway between the metropolitan hubs of Johannesburg and Pretoria, Midrand has become a major commercial hotspot. Though it was only formally established in 1981 it has been rapidly expanding as the space between Johannesburg and Pretoria starts to get smaller and smaller as more residential and commercial properties flow out of the urban sprawl of South Africa’s biggest cities. To many, it seems as if Midrand sprung up from nothing, but there are many reasons it has become more popular in recent times.

The cycle of development

We’ve mentioned it’s the great location but that’s not the only draw Midrand has for business owners. Many more people have started to move out of Johannesburg and Pretoria to the more spacious estates and suburbs of the outskirts. Areas like Waterfall are full of secure, luxury estates that appeal to those who are sick of the hustle and bustle of city life and are looking for a more natural, free way of life.

Many businesses’ have seen this shift and decided to move their offices to the Midrand area, to be closer to these attractive residential nodes. There are other residential areas in Midrand that cater to a variety of income groups who move to be in proximity to their jobs. The more residents move to these nodes, the more companies want to move to the surrounding areas creating a cycle of development.

What makes it a good place for commerce

Due to the fact that it’s a relatively new development Midrand still has available mixed-use space. Johannesburg and Pretoria have become so dense demand for space have moved to the outer limits of the cities. These various usage zones cater to a diverse set of needs including; pharmaceuticals, textiles, telecommunications and motor companies. Owners and renters from many industries including; food and beverage suppliers and manufacturers, power and electrical suppliers, IT companies, laboratories, water suppliers, security companies, training and education institutions. There is a property option to suit every need and budget. It’s also close to many major suppliers.

Midrand also sits on major transport routes, including a main highway. It’s also benefiting from the recent improvements in public transport in the area. The Gautrain makes travel from Johannesburg to Pretoria, and in between, easier than ever before. Gauteng is also in the process of creating an accessible and far-reaching bus service much like the MyCiti bus system in Cape Town. This will link the three major commercial hubs of Gauteng, and the whole country, through safe, fast and regulated public transport.

Usage and industries

There is an ever-increasing need for warehouse space with little availability. This will drive up the rental prices and benefit the owners of the properties these generally cost between R6500 to R10 000/sqm and rents range from R50 to R80/sqm. Office space typically costs between R12 000 and R18 000/sqm and rents range from R75 to R180/sqm. The best growth in both rental and sales price has been enjoyed by secure business parks making these a very good investment if you can get them. The original suburbs of Midrand have experienced around 10% per annum in rental price growth. The newer suburbs like Waterfall have experienced rental price growth of around 20 to 30% and yields vary between 9 and 10.5%.

Buying a mini-warehouse in Midrand is a great investment considering the returns you are likely to make in the long run. Midrand is fast becoming one of South Africa’s most sought-after commercial areas and it would be a good idea to get in now before it takes off.

To find out how to turn a commercial property into an amazing investment book a seat at one of our FREE property seminars today!

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