The capital city is on an all time high. Realistically, this is in the form of business confidence. Actual high times in the market place are still some months away, as prudent investors take the opportunity to snap up any decently located and well constructed building within the central city area. This forms part of a spectacular recovery period sparked by the development of the Liberty Regional Shopping Mall, which has created a new extension to the Central Business District.

Consultations with numerous well respected brokers and agents revealed that the property in question had been on most of their books for the past 8 to 10 years. One can only imagine the state of its surroundings given such information.

My inspection revealed that the building itself was actually in mint condition. It was also fully let at below market related rates, offering mixed use accommodation and being close to public transportation. However, it wasn't difficult to understand the immediate negative stigma attached to the property. Why had it stood for so long as activity surged and stocks were depleted in surrounding areas? Its location was poor. We all know that one does not need a Bachelor of Science in Property Studies to understand the importance of the phrase 'location, location, location' within the real estate industry. But, today I'll explain why such phrases and 'old school' sentiment will no longer work in the New South Africa.

There is a new breed of property investor on the street. Within the buy-to-let market, they do not see tenants as a problem. Instead, they aim to provide decent accommodation for the people who appreciate it most. Poorly maintained accommodation is not acceptable to this breed. They know first hand the difficulties imposed by leaking roofs or inadequate plumbing fixtures and fittings. The residents and traders that frequent their locations of choice are of their own kind. Hence, what appears as a risky tenant profile changes to a more understandable tenant profile. They aim to provide a service for acceptable returns, and don't necessarily require an outstanding return.

As Black Economic Empowerment spreads its wings on a national basis, the property market is establishing itself in locations that historically defied the perception of a good location. Investments into these areas are carefully addressed in terms of risk profile, and are usually purchased at yields in the region of 20%, probably never to be seen again within the commercial market of South Africa. Boundaries are becoming blurred and the black emerging market is not afraid to venture parts of the jungle that they are accustomed to.

I say, "Well done to these courageous few! Good returns will come your way". And, "Too bad", to the present majority who dictate the 'old market'. Your purchasers' market and resultant market influence is depleting in stock levels very quickly.

Your comments and queries will be appreciated and can be directed to feedback@denovorealestate.com

Copy Right De Novo Real Estate 2005. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed without the explicit written consent the holder of these rights.