In an environment where local and foreign investment is scarce, Ford's R15 billion investment into Waltloo Pretoria will not go unnoticed by property investors. This R15 billion vote of confidence by Ford should drive up the demand for properties from both a buying and renting perspective in the area, which may lead to an increase in property prices. Waltloo is a highly industrialized area and houses the Tshwane Automotive Special Economic Zone ("SEZ"), forming part of Pretoria and is situated close to OR Tambo International Airport (58km), Pretoria CBD (11km), and Johannesburg CBD (69km) with easy access to N1 and N4 highways. Ford's mammoth investment will have a ripple effect on Ford's suppliers already based in Waltloo such as Faurecia and Jamsco Automotive Assemblies. These companies will be required to expand operations alongside their largest client's requirement resulting in increased property demand. According to Channel News Asia (Bavier, et al., 2021), the project will create 1,200 direct jobs and 10,000 indirect jobs, which is significant considering the area currently employs 50,000 people. The increase in job creation will attract other businesses to the area.
According to the graph below, average sales prices in Waltloo have only increased by 8.09% from R12.03mn in 2012 to R13.00mn in 2020, offering investors an attractive historical entry price which translates into a buyer’s market. ANVIL is witnessing high yielding investment properties coming to market, offering investors significant value for money at Net Operating Income (“NOI”) yields as high as 12.50%. Interestingly, these investment properties in Waltloo that are listed for sale are not distressed properties sales, but are rather fully let industrial properties in most cases.
No. of Sales Vs. Average Sales Prices.
For some time, ANVIL has viewed Waltloo as one of the most attractive industrial areas in Gauteng. This view is based on the area's strategic position in servicing Johannesburg, Pretoria, and Polokwane. Further, Waltloo is an industrial node with multinational businesses operating from the area such as Albany Bakery, BP, British American Tobacco, Johnson and Johnson, Premier Foods, Sasol and Shoprite. This is value accretive for property prices in the area. Rentals are also affordable and vacancies are not difficult to fill. In summary, Waltloo offers significant value in terms of attractive NOI yields as high as 12.50% versus other new industrial precincts with NOI yields as low as 8.00%.
ANVIL currently has several attractively priced fully tenanted investment opportunities in Waltloo ranging from R10 million up to R200 million. ANVIL welcomes the opportunity to help you identify and invest in attractively priced commercial and industrial properties. We will love to discuss your property requirements with you.
Author: Jeandré Pike (4 February 2021)
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Bavier, J., Rumney, E., Potter, M. & Reuters, 2021. Channel News Asia. [Online]
Available at: https://www.channelnewsasia.com/news/business/ford-to-invest-us-1-billion-to-upgrade-south-africa-operations-14095522
[Accessed 3 February 2021].