Demand from multi-national companies continues to stimulate residential rental market
International corporates seek to rent residential properties for their employees
“While many South African consumers have started to feel the economic pinch in recent months, the demand for accommodation in the greater Johannesburg area has continued unabated, and this has ensured that the residential rental property market in much of the region has remained robust. The letting market in certain centres also continues to be stimulated by multi-national corporates seeking upmarket homes for their employees.”
So says Rupert Finnemore, the regional head of Pam Golding Properties in Gauteng. According to Finnemore, Johannesburg, the economic powerhouse of South Africa, is continuing to attract visitors from all over the world, as well as multinational companies seeking to create a presence for themselves on the continent. He points out that the executives and representatives of these companies require suitable, upmarket accommodation while working in the country.
“Over the last 10 years there has been an increasing demand from corporates from all over the world to rent residential properties for their employees and their families in Johannesburg, Sandton and the northern suburbs. Many of these organisations rent homes on behalf of their staff, while others provide a rental allowance which enables their executives to find their own accommodation.”
“Whatever the case, there is little doubt that the demand from corporates and their employees is assisting to drive the upmarket segment of the rental property in certain desirable suburbs of Johannesburg, and investors have been able to take advantage of the excellent buy-to-rent opportunities that have been available in such areas.”
According to Finnemore, corporate rental clients of Pam Golding Properties are from leading companies from a range of sectors. The corporates are for the most part multinational companies that in some cases are seeking to accommodate hundreds of employees.
Jason Shaw, manager of Pam Golding Properties Fourways and Midrand, says that while the greater Johannesburg area remains ever popular, demand is particularly high in such booming growth nodes as Fourways.
“Residential estates such as Dainfern, Fourways Gardens and Cedar Lakes attract large numbers of international executives seeking to rent property. In Dainfern, which is one of the most popular estates in the area, approximately one third of all rentals is to multinational companies,” adds Shaw.
“Apartments and homes in the massive new lifestyle development of nearby Steyn City, which offers residents a secure and completely self-contained lifestyle concept, are also already proving highly popular among corporate employees, and adding further impetus to the market in the region. Indeed, seven rentals were made at Steyn City in February, one of which was a corporate rental of R100 000 per month. Two other homes have been rented out for between R120 000 and R130 000 per month on long-term contracts. Two bedroom apartments are typically rented out unfurnished for between R18 000 and R20 000 per month which translates to a gross yield of over 8% in the first year.”
Shaw says that rental returns on suitable homes in the Fourways area are among the highest in country. Properties in an area such as Dainfern achieve returns of between eight and nine percent per annum. This in turn makes homes in the area appealing to investors in the buy-to-rent market.
“Corporates approach Pam Golding Properties and we are able to link them with suitable rental accommodation through our vast network of clients who have invested in properties with the explicit purpose of letting them. Investors who are active in the corporate market in turn appreciate the fact that they are dealing with highly reputable businesses and executives who are wanting to negotiate rental contracts of between one and three years.”
“International corporates have extremely strict requirements for the lodging their staff and their families, and tend to opt for areas which offer a secure community lifestyle where every convenience is at hand. Steyn City fits the bill in every respect and it is attracting the attention of multinational clients.
“We have had a number of investors who have taken advantage of this market within the Steyn City since the first phase of the residential development went on sale in March 2015,” adds Pam Golding Properties rental agent Leanne Jamieson. “They have seen the potential of the lifestyle resort and some have purchased properties with a view to letting them.”
“Steyn City has a wide range of luxury accommodation available including free-hold homes, clusters and apartments. With the vast array of facilities and leisure activities on offer to residents the development offers them a quality of life that simply is not available anywhere else in Johannesburg. Steyn City allows residents to enjoy an active outdoor life close to nature within a like-minded community, where every amenity is close to hand,” says Jamieson.
Residents are able to freely interact with their neighbours should they wish to do so while enjoying 2 000 acres of indigenous parklands and urban forest, an area larger than New York’s Central Park. There are paved pedestrian boulevards; shuttle buses, running and cycle tracks; a skate park; outdoor gyms; interactive land art, equestrian centre, children’s play nodes, tennis courts and fishing dams; an international award winning clubhouse as well as a Nicklaus design 18 hole championship golf course. The city centre, which will feature a selection of restaurants, retail outlets and apartments, will open in 2018/2019. A commercial park and a school are also now under development scheduled to open in January 2018.
“For many executives it is particularly important to have outstanding schools for their children within easy reach. One of the reasons why the greater Fourways area attracts so many expatriates and international business people is because the area provides easy access to a large number of good educational institutions.”
Jamieson says these include a host of quality local private schools in addition to the American International School. The Steyn City school that is to be developed will be a groundbreaking concept in learning and teaching.
“Another aspect that is of critical importance to corporates is the safety of their employees. Steyn City’s security systems are state-of-the art with electric tag systems being used for vehicles, biometric admission procedures and thermal and CCTV cameras being employed together with advanced analytics along the perimeter. In addition, a task force of over 140 trained security personnel conduct foot patrols as well as a dog patrol unit
“Everything the resident could possibly need is to hand within this secure lifestyle resort, which is a totally new concept in community living in South Africa. Offering an integrated lifestyle that reminds one of living in a luxury holiday resort, homes in the upmarket development represent an outstanding investment. For the investor, properties within Steyn City offer not only the prospect of long-term capital accumulation but sound rental returns,” concludes Jamieson.
For further information please contact Leanne Jameson of Pam Golding Properties, telephone 010 597 1040 or 072 078 9562, or email [email protected]