Greg Dart
High Street Auction Co.
Director
Property conversions – office blocks to apartment blocks, retail centres to medical facilities or workshops into for-hire storage or warehouses – are the name of the property game of late.
“Not only does the auction platform unlock liquidity in the marketplace for private investors or state-owned enterprises with large property portfolios that no longer match their future business strategies, but it also provides an invaluable foundation for future development and redevelopment,” says High Street Auction Co director, Greg Dart.
Some of the almost 40 properties that will come under the High Street Auction Co. hammer on July 17 could be ripe for re-invention, Dart believes.
Repurpose rather than rebuild
Dart notes that the commercial property market is still oversupplied, with market forces now driving the need for retrofitting office spaces.
“There is a need for capital allocation for asset repurposing. Converting underperforming office stock into alternative uses will ultimately remove obsolete inventory and tighten the market,” he observes.
The consensus at High Street is that, in many instances, it is better to repurpose a building than build from scratch. Innovating to extend the lives of existing buildings saves costs, time, and energy, and contributes to sustainability. Construction time can be reduced, and challenges such as zoning and building restrictions can be diminished.
Relooking at retail
At present, both shoppers and investors favour convenience and neighbourhood retail centres, anchored by grocery or pharmacy tenants, for their stable footfall, essential service appeal, and resilience to economic volatility, rather than large regional malls.
However, according to Dart, it doesn’t stop there.
Many retail brands and landlords are now adopting hybrid models, utilising physical stores as both showrooms and distribution points, thereby enhancing their ability to meet the demands of consumers who shop online. Some properties are being converted or upgraded to cater for this, as well as for other commercial tenants such as medical practitioners and professional services.
Dart believes that the Sunward Palms in Sunward Park, Gauteng, which already has provision for medical facilities and will be auctioned on July 17, is an example.
“This 6232m² property is ideally suited for a proposed medical day hospital development as it is perfectly positioned to complement the existing anchor tenant, Virgin Active, plus nearby medical facilities including the Netcare Sunward Park Hospital,” he explains.
Accommodating change
Another segment of the commercial property space that is evolving is the hospitality sector. Its recovery is being driven by the entrance of new operators who are converting older properties to better serve new tourism requirements or even reusing these properties as medical facilities, retirement centres, or residential estates.
One such venue, known as Dozi’s Back to the Roots Venue at Hartebeespoort in the North West province, will feature in the 17 July auction, as will properties in Dullstroom. These include the charming Cpirit Market Place, with its retail offerings housed in repurposed black shipping containers, seven delightful Cpirit Country Haven Self-Catering Cottages, and the Cpirit Village View Guesthouse.
Rethinking residential
However, the most discussed trend currently is the conversion of commercial properties into residential and student accommodation. Recent trends favour mixed-use developments that reduce travel costs and congestion.
Dart attributes the rise in mixed-use developments to urban migration, lifestyle integration, and a continued remote work culture. The growth of live-work-play precincts reflects both the diversification of income streams (residential, retail, office) and their strong appeal to tenants seeking lifestyle and flexibility.
He acknowledges that there is a strong case for investing in commercial to residential conversions – especially those with an affordable housing element. In fact, many local authorities are actively seeking partnerships with developers to use inner-city residential projects to tackle growing social housing backlogs and urban decay in city centres.
An example of what can be achieved was a property in Salt River that was sold by High Street to major precinct developer Divercity for R30-million. This evolved into Divercity’s R280-million inaugural Cape Town development (known as 9 Hopkins), which broke ground last year and will deliver around 400 affordable rental apartments to Salt River.