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What makes a good suburb great?
International Property Solutions
23 May 2007
There is old property investment maxim that surely every investor has heard of. It goes: “There are three things to consider when investing in property, and they are location, location and location.”
So for investment purposes, what makes a suburb great?
Let’s look at a real world example: Sunninghill, in Johannesburg’s thriving northern suburbs. Until a few years ago, Sunninghill was considered a fringe suburb, on the outskirts of Johannesburg. Now it’s one of the most sought after suburbs in the city. Why?
Johannesburg was established as a mining town in the late 1880’s, and since then has been expanding in a northerly direction. The CBD was established north of the mines away from the prevailing dusty winds. Suburbs like Parktown were established on the northern edge as people found employment in the city, but from around the 1980’s the CBD started falling into decline and many businesses migrated further north: to Sandton.
Over the past 25 years Sandton has boomed to the point where it now has some of the most expensive property in the country, to the point where businesses and residents have been priced out of the market.
The trend in the last 10 years has seen many businesses moving into the Midrand area, as Pretoria and Johannesburg begin to merge into a large metropolis.
The result is a “golden corridor” from the old CBD north alongside the M1 through Parktown, Rosebank, Illovo, Sandton, Rivonia, Sunninghill and Midrand, which is very much the route of the R14 billion Gautrain project.
Today, Sunninghill is home to a number of prestigious businesses. SARS and Eskom occupy the massive Megawatt Park offices, due to undergo further expansion in the near future, while Price Waterhouse Coopers, EDS, Computer Associates, Acer, Unisys and ABB (all global businesses) are just a few big names in the area.
These consultancies, technology firms, advertising agencies and accountancy giants attract young, professional employees, prepared to pay top dollar for local accommodation and responsible enough to take good care of their their homes: the ideal tenant.
With the businesses and residents in place, it wasn’t long before the retailers followed suit: shopping centres have sprung up in the area, with top-quality anchor tenants, including Woolworths, Pick ‘n Pay, Planet Fitness & Virgin Active gyms, and a range of trendy upmarket cafes and restuarants, such as Nando’s, Doppio Zero and Ocean Basket.
What else has Sunninghill got? A world-class hospital? Easy access to top golf courses? A 5-minute drive to the popular Fourways & Montecasino lifestyle node? One of the lowest crime rates in Johannesburg? Easy access to the N1, M1, N3, Sandton, Midrand and even Pretoria? Or Option E: all of the above?
Property investors will appreciate the fact that Sunninghill is currently receiving R20 million in infrastructure investment, including the contruction of the four-lane K60 route between Fourways and Midrand. So the future is bright. And importantly, there is precious little space left for expansion: With supply limited and demand increasing, prices are sure to keep rising.
Is that enough to make Sunninghill a “great” suburb? If you think it is, and if you (and your partner?) earn £30-£40,000 per annum, you can afford a top-quality apartment in The Kanyin, a new development by leading developer Balwin Properties. And what’s better: IPS will make sure it all runs as smoothly as possible – including assisting you in finding a tenant! All you need to do is turn up at their London show day on the 17th of June 2007.
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