In Paarl, Wellington and the surrounding area, commercial activity is not considered beyond tourism, retail outlets or wine and fruit production. Important aspects these may be but there is much more commercial activity to be discovered.
The towns are located 85 kilometres away from Cape Town CBD, its international airport and harbour. The R44, and R101 provides easy access into Paarl, while the R45 and N1 are on the town’s boundaries and can be used as an alternate route. Wellington, 14 kilometres to the north, also has easy access to the R101 and N1 via Paarl, while the R44 runs through the town.
“ Paarl and Wellington provide great residential options and country living, with a relatively low crime rate and access to main routes and nearby cities,” says Marizanne Rischbieter of the Rawson’s commercial office in Wellington,
“ It’s a desirable area to establish a business.” Retail outlets include supermarkets, clothing, furniture, hardware, beauty salons, gyms, fast food outlets, restaurants and factory shops. The Paarl Mountain Local Nature Reserve is a popular choice among locals and tourists, who enjoy family picnics or a scenic nature trail.
Most businesses in the area are agricultural, viticulture and fruit farming. Closely connected are import and export entities, fruit drying or processing plants, product packaging and labelling, wine making, transport and leather goods. Quantum Foods head office is based in Wellington while James Sedgewick distillers are also based here. Redemption Leather is a popular tourist venue and Stokkiesdraai Vine Nursery supplies grafted vines to many of South Africa’s vineyards. Pacmar Juices, Nibbly Bits, Glodina Towels, Paarl Vallei Bottling and Spilo are also found in Wellington. “The shortage of industrial property and vacant land may impede potential growth,” suggests Rischbieter, “unless agricultural land can be rezoned to make space for new industrial developments.”
The commercial rental market
Commercial property in the Wellington and Paarl area consists of 37.5% B- and C-grade office space, 37.5% predominantly medium grade industrial property and 25% retail space.” Good residential options and affordable commercial rentals may be a clinching factor in the decision to relocate a firm to this area,” suggests Rischbieter, “ though the residential market remains far more active than the commercial market.” Commercial rental is currently between R27 and R56 per square metre, but shortage of commercial stock may cause a rise in rentals as demand increases, thus investors would be advised to purchase vacant land and build for the purpose of leasing. The main demand is for premises of between 150 and 600 square metres, with no particular preference between Paarl and Wellington.
Purchasing commercial property
Very little industrial stock is currently available, though retail and office conversions occasionally come onto the market. “Prices seem somewhat inflated due to lack of stock, but there is one prime industrial development available at present,” explains Rischbieter. “This can be found on the outskirts of Paarl, in the form of vacant land located in the Paarl-Zandwyk Industrial Park.” The price of vacant land is currently in the region of R700 to R1100 per square metre, while the price of commercial buildings range between R1.8 million and R4 million, though there are many factors which may impact upon these figures. The current demand is for light industrial properties in the price range of R2 million to R3.5 million and ranging in size from 150 square metres to 1000 square metres.
Most developers are purchasing dilapidated commercial property then upgrading and leasing it in their private capacity. It is rare that such a property will be offered for resale, thus new developments must be the main focus, though the chronic lack of vacant land is ongoing.
“If you are a seller you will realise your price and sell within weeks,” predicts Rischbieter, “but if you are a buyer your search will take time and you will be in competition with other buyers, therefore I suggest you develop land and build to lease.