Derrick Pautz, Atterbury head of developments – Gauteng
Commercial property performance has always followed a cycle, with one sector on top while the others wait their turn to come around again. Even though the pandemic disrupted the natural property cycle, which is undoubtedly testing the mettle of all property players, agility through the cycles should be a core competency for successful property investment and development.
Industrial property has emerged as a relatively safe haven, driven by e-commerce and delivery gaining traction during the lockdowns and creating a relative boom in logistics and warehousing. Uncertainty about the future of working practices has contributed to hesitancy and lower levels of office space enquiries and therefore new development. Retail has tipped in favour of lifestyle, community, outdoor and value offerings.
This is where the markets have landed post-pandemic, for now, at least. There is no doubt they will shift again in the future.
In this ever-changing environment, mixed-use developments, especially the large-scale kind for which Atterbury has become known, provide an exceptionally adaptable platform for success in volatile markets. Entrepreneurial Atterbury is able to pivot off a base of expertise and relationships built up over nearly 30 years – and can act quickly. The company moved towards mixed-use properties, where each property use is supported by the others, well before Covid-19. Finding opportunities and doing the best in challenging times is one of Atterbury’s strengths. Amid the global financial crisis in 2008, it secured the commercial development rights for the landmark 330ha Waterfall Estate in Midrand, north of Sandton.
Good mixed-use assets are planned with the inherent ability to adapt as quickly as the market shifts. Construction of the large-scale modern, multifaceted development Castle Gate in Pretoria began in 2019. Its first phase opened to the public a year ago in November 2020 -- the exceptionally successful Castle Gate Lifestyle. The Castle Gate development plan had initially scheduled the next phase of development to cater to the office and tourism markets. Of course, this doesn’t make sense right now, but with a nimble approach to mixed-use development, priorities can be swiftly refocused to new areas of demand. It will instead answer the need for value retail that its market has so clearly expressed, which also supports and complements the lifestyle retail offering already operating.
Then, in the manner of new mixed-use properties, Castle Gate’s development will continue to add property uses that make the most significant contribution to the overall project at each new phase. With this in mind, residential development is likely to commence at Castle Gate in the next two years.
Similarly, having successfully proposed an extensive office-focused mixed-use development at Barlow Park in Sandton shortly before COVID-19 hit South Africa, Atterbury is in the process of modifying the project to become a community-focused mixed-use development.
These cases show that mixed-use developments can maintain their momentum even during the toughest of times by being a very responsive process. But the progression cannot be so elastic that it becomes haphazard. Each phase should add to the functioning of the development’s overall ecosystem, building synergies and contributing to its successful operation. An experienced developer is able to drive the right balance.
The ultimate advantage of creating a big precinct in smaller phases is that it is developed through different cycles, providing it with in-built flexibility for responsiveness and making it a more resilient income-producing asset.
As Atterbury continues to develop its current projects, it is also as keen as ever to grow its long-term development pipeline. We have some excellent landholdings but would like even more. With adversity comes opportunity, and now is the perfect time to plan new projects and strike up new partnerships.
