PREPARED BY: DR DIRK A PRINSLOO - Waterfall Estate

1 Waterfall Business Estate midrand 1 09v 4078 PREPARED BY: DR dirk A PRINSLOO Waterfall BUSINESS Estate , midrand FOR ATTERBURY Waterfall INVESTMENT COMPANY FEBRUARY 2010 2 URBAN STUDIES Waterfall Business Estate , midrand , 2010 Tel. (011) 888-2169 E-mail: CONTENT EXECUTIVE SUMMARY 1. BACKGROUND .. 8 2. RESEARCH OBJECTIVES .. 8 3. RESEARCH METHODOLOGY .. 9 Desk survey .. 9 Field survey .. 9 4. SOUTH AFRICAN PROPERTY MARKET .. 12 General economic indicators for South Africa .. 12 Economy/GDP per Province .. 15 5. POPULATION, DEMOGRAPHIC PROFILE - MACRO LEVEL .. 18 Total Gauteng Population and Projected Growth .. 18 6. RETAIL SUPPLY IN SOUTH AFRICA .. 21 Geographical Distribution of Shopping Centre Retail Space.

2 22 Gauteng retail market .. 23 7. OFFICE MARKET .. 25 National office market in the major metropolitan areas .. 25 Johannesburg office market take-up rates .. 29 8. RESIDENTIAL MARKET .. 31 House prices in Johannesburg vs. the rest of South Africa .. 31 Growth nodes in Gauteng .. 32 9. BROADER midrand AREA .. 35 Population numbers, growth and projections .. 35 Socio-economic and demographic profile .. 40 Socio-economic and demographic profile of the more affluent residents in the western side of midrand : .. 42 Socio-economic and demographic profile of the below average households in the eastern side of midrand : .. 43 Building plans approved and completed in midrand :2000-2009 .. 44 Retail Supply in the midrand area.

3 48 Existing retail facilities in the area .. 48 Shopping behaviour: More affluent western side of midrand .. 50 Shopping behaviour: Below average suburbs midrand East .. 50 Rental levels .. 51 Industrial Developments .. 52 Office market in midrand and adjacent office nodes .. 57 House prices and sales in the area .. 60 Single residential units .. 60 Multiple units .. 64 10. NODAL DEVELOPMENT ELSEWHERE IN GREATER JOHANNESBURG .. 69 Centurion .. 69 Fourways .. 74 Sunninghill/Rivonia .. 78 URBAN STUDIES Waterfall Business Estate , midrand , 2010 Tel. (011) 888-2169 E-mail: 11. MARKET ATTRACTIVENESS SCORE .. 82 Age of the surrounding nodes .. 83 12. NEW DEVELOPMENTS .. 84 13. SITE EVALUATION.

4 89 Meso environment/broader area .. 89 Office site evaluation .. 89 Retail site evaluation .. 90 Industrial site evaluation .. 92 Waterfall Business Estate Master Locality Plan .. 93 14. MARKET POTENTIAL FOR VARIOUS LAND USE CATEGORIES .. 95 Residential development .. 96 Retail development .. 99 Industrial development .. 100 Office development .. 101 Other activities as part of a New Town development .. 101 15. CONCLUSION AND RECOMMENDATIONS .. 103 4 URBAN STUDIES Waterfall Business Estate , midrand , 2010 Tel. (011) 888-2169 E-mail: EXECUTIVE SUMMARY Attributes Comments Macro Economic Indicators GDP Slow recovery Time lag. Will grow at by 2012. Interest Rates Down by Will remain in this range for next 3 years.

5 Inflation First time in 51 months within government target. Currently down from to Gauteng Market GDP Economic barometer still negative. Recovery expected from end of Q2 2009. GDP Contribution 33% of national economy GDP Sectors Finance, manufacturing and retail trade Economic indicators Growth, construction and financial services indices are still negative while electricity and manufacturing are positive. Population 2010 - 10,4 million people 2025 12,7 million people 2050 17,4 million people Johannesburg Tshwane/Pretoria midrand 2008 3,4 million people 2008 2 million people 2008 - 400 000 people Socio economic profile Johannesburg has the highest socio-economic and demographic profile (46% in LSM 7-10).

6 Retail Market Supply 8% growth in 2004-7 with 12% currently (time lag since 2006). Expected to be down to 5-6%. Gauteng represents 45% of all the shopping centre space in South Africa. This is higher than the 33% contribution made to the GDP by Gauteng; Gauteng represents 64% of all the shopping centres with a size of >50 000m . Office Market of all A and B grade office space in South Africa, Johannesburg represents 59% compared to 17% in Pretoria and 14% in Cape Town; vacancy levels in the whole of Johannesburg is currently at ; midrand represents the third largest office node in Greater Johannesburg after Johannesburg CBD and Sandton. Broader midrand Market Population Numbers and growth there is currently 105 000 households living in the midrand area; with a 2% growth rate this figure could increase to almost 115 000 households in 2015.

7 Has a dual socio-economic profile with people in informal houses and affluent households forming part of golf and security estates. This will clearly be highlighted in the next section. midrand building plans very good residential growth, a consistent growth in the market supply of office space, a lower supply of industrial space because of electricity shortage and a low take up rate for retail space. Retail supply in midrand In total almost 150 000m of shopping space is located within 5 km from midrand Central; These retail facilities consist of a number of local and smaller convenience centres; The Boulders is the largest at almost 50 000m , mainly catering for customers living to the east of midrand .

8 URBAN STUDIES Waterfall Business Estate , midrand , 2010 Tel. (011) 888-2169 E-mail: 1 Annual take-up rates once the area has been established as an office address could vary between 20 000m and 50 000m . Shopping behaviour Western side No one shopping centre dominates. Centres in Kyalami cater for the convenience needs, while a number of bigger centres are patronised for other retail products. It is clear from the above mentioned that very little support is directed to shopping facilities on the eastern side of midrand . Shopping behaviour Eastern side The two community type centres in Tembisa is more or less the same size at 18 000m each; most of the retail support is still directed towards the Kempton Park area especially Festival Mall and The Boulders in midrand .

9 Industrial Market Linbro Industrial Park - located on the N3 at Marlboro Road (estimated annual take up of 12 500m ) Longmeadow Business Park located on the N3 at Modderfontein Road (estimated annual take up of 64 000m ) Grand Central Airport area Randtjiespark Industrial rentals Most industrial rentals declined during difficult economic times. Office Market the supply of office space in the suburbs of Woodmead, Sunninghill, Fourways and midrand was million m for 2009; the vacancy rate is currently ; It is important to note that the highest annual take-up rate1 also reflects the most attractive/popular office nodes in Johannesburg: midrand 41 000m Sunninghill 15 000m Woodmead 34 000m The take up rate for offices in midrand is the second highest after Sandton.

10 This take up is slightly higher than the supply of new space of 30 000m . Office Rentals Rivonia increased, midrand moved sideways Sunninghill and Woodmead are down. Residential Market Single residential units More than 10 000 residential units came on the market in these specific residential areas since 2001; Sales peaked during 2007 at almost 1 700 units, Average house prices during 2009 varies between R700 000 - million; During 2008/9 some suburbs reflected good growth, while others indicated negative growth; 45% of all the sales in this market was in the price range R1 million to R2 million; A further 16% was sold above R2 million. This clearly emphasise the nature of this market, reflecting a high socio economic status area.