Guy de la Porte of Airport Property has sold 16 Esso Road in Montague Gardens for R 6.325 Million.
The property was purchased as an investment by the owners of the business which occupies the property. This transaction made sense for the tenant to purchase the property as the rental was not much less than the bond repayment. With annual escalations, the tenant will be better off from a cash flow perspective within 2.5 years of purchasing the property. There are always pros and cons when it comes to buying versus renting, however, it does make sense for a tenant to buy a property they occupy when they are settled in the property, financially sound and the property will suit there needs for into the future. This property was sold at a net initial yield of 10,5% based on the rental being paid by the tenant. The property consisted mainly of offices with a workshop area.
This property was sold in collaboration with Jonty de la Porte of De La Porte Property Group, who specialises in Commercial and Industrial property in the West Coast growth corridor.
Investment properties are in high demand in Montague Gardens which is one of Cape Town’s most popular areas for warehousing, distribution and service businesses. Montague Gardens is situated in the rapidly growing West Coast growth node. More details on this property can be viewed here