These three trendy residential buildings used to be offices - and young workers love them

Timothy Rangongo , Business Insider SA

Oct 02, 2018, 08:26 AM

Various property developments that were previously office spaces and have now been converted into apartments.

The trend of converting office spaces into apartments is still gaining traction in the Johannesburg CBD.
This is partly due to rising vacancy rates in the commercial property sector.
Newly converted buildings are proving a hit with young professionals who prefer to live close to work.

The conversion of former office buildings into residential ones is taking off, especially in central business districts, according to Joel Rosen, MD at Prime Residential, who has himself been involved in a number of these conversions.

"There are currently a large number of office vacancies, especially in some areas of Johannesburg. With fewer new commercial tenants entering the market, there is often no other option but to look at alternative ways to make these investments work for you," says Rosen.

3 key factors giving rise to the office-to-apartment trend

1) Commercial property sector under pressure - vacancy rates increasing.

2) Young professionals looking to live closer to work.

3) Mid-market residential property also gaining favour with young professionals.

These residential properties have become an attractive asset class that delivers better returns than commercial properties, Rosen says.

These three trendy residential buildings used to be offices

94 on Main

94 on Main Street in Joburg used to house the Gauteng provincial treasury. (Redcon Property Management)

Formerly known as the Gauteng Provincial Treasury's Matlotlo House, this building on Johannesburg's iconic Main Street used to be owned by Redefine Properties before being acquired by Redcon Property Management and subsequently converted into apartments.

Newly converted apartment from office at 94 on Main. (Redcon Property Management)

Now in the late development stages, 94 on Main has an occupancy rate of over 70% with two floors still under construction, according to the general manager of Redcon, Roopa Chattergoon.

The building is a hit with young professionals employed by banks in the area or who like being close to the nearby courts, Chattergoon says.

Rand President

Rand President apartments in Randburg, Johannesburg. (Supplied)

Rand President lies in an urban node Rosen believes has much potential, even though it is not in Johannesburg's main business heart.

In Randburg "there is a high vacancy in B-grade office space, a very high demand for residential rentals and it is ideally situated for those working in Randburg and Sandton, with excellent access to public transport," says Rosen. "These sorts of areas are where the real opportunity lies."

Formerly an office and now a trendy apartment at Rand President. (Supplied)

267 on Surrey

267 on Surrey as an office building before (left) and after being converted into flats (right). (Supplied)

267 on Surrey also forms part of Prime's residential property portfolio. The building was a commercial property before being turned into apartments.

Working with people who have real experience in conversions, who know the markets, and who understand how to maximise investment returns with the right finance is the key to making developments [like 267 on Surrey] work, according to Gary Palmer, CEO of Paragon Lending Solutions.