Demand from multinationals creating buy-to-let opportunities
Demand for rental accommodation in the greater Johannesburg area continues unabated, reports Rupert Finnemore, regional head of the Pam Golding Properties in Gauteng. In certain suburbs, this is being stimulated by multinationals seeking upmarket homes for their employees, creating opportunities for buy-to-let investors.
Finnemore says Johannesburg, the economic powerhouse of South Africa, is continuing to attract visitors from all over the world, as well as multinationals seeking to create a presence for themselves on the continent. He points out 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.”
Finnemore says corporate rental clients of Pam Golding Properties are from leading companies from a range of sectors. The corporates are for the most part multinationals 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 multinationals.”
“Apartments and homes in the massive new lifestyle development of nearby Steyn City (pictured), 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 into 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 the 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.