PROPERTY: Demand For Paarl Commercial And Industrial Property
Recent Western Cape Business News
Paarl is not only the largest town in the Boland, but the second largest commercial centre in the Western Cape. Its central location, just off the N1, about a half an hour’s drive from the city and close to other Boland towns make it an attractive option for commercial and industrial businesses says Seeff Winelands managing director, Pierre Germishuys.
Rates in the town are significantly lower than in the city and other towns, he says. In Franschhoek for example, commercial rental rates range between R150 and R250/sqm compared to between R30/sqm for industrial property and R110/sqm for office space in Paarl. This represents better value for businesses looking to cut and contain costs. This affordability, he says is translating into increased demand, both for rental and investment in commercial and industrial space. Investors are finding good value and are currently looking to yield between 9% and 10% annually on rental returns.
The picturesque setting at the foot of the Drakenstein Mountains makes for an inspiring environment in which to live and work and there is a stable labour pool in the town. The economy is largely driven by businesses that serve the more than 50 wine farms, from manufacturing to consulting, but other businesses are growing, he says.
The town’s 11-km long Main Road is lined with working vineyards and beautifully restored Cape Dutch, Georgian and Victorian buildings, most of which now operate as businesses, from retail to services and consulting. The KWV building is popular and Seeff has placed several new tenants in the building at rental rates of between R80/sqm and R110sqm. Sales to investors include two adjacent buildings at 42 Main Road that was bought for R6,5 million. Both buildings have been restored and further building is planned. Tenants have already been secured by Seeff at rental rates of between R100/sqm and R110/sqm.
Commercial properties in the centre of the town currently sell from around R1,595 million for a historic semi on a 393sqm plot to R3,784 million for a corner-building in Main Road that offers an ideal shop front setting says agent, Piet Uys. A 628sqm building on a plot of 780sqm with a secured yard that would suit a business such as a hardware store with display areas is on offer for R4,75 million. A vacant plot on Main Road that comprises two industrial corner stands, about 626sqm in extent is priced at around R1,4 million.
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