Finding a location to open a business in Grahamstown is extremely difficult in the CBD and surrounding areas, as rentals are sky-high and precious little is for sale.
Finding a location to open a business in Grahamstown is extremely difficult in the CBD and surrounding areas, as rentals are sky-high and precious little is for sale.
“The supply of commercial property is low because all the property that exists is occupied by businesses,” said Daphne Timm of Pam Golding Estates.
“Business is good for most well established businesses, so they are obviously not going to sell.”
When Grocott’s Mail approached them recently, none of the 12 other estate agents in Grahamstown had any shops available for rental. Reasons for this shortage of shop space includes high demand by businesses; difficulties faced when trying to rezone property from residential to commercial; and restrictions on changes to properties that have heritage status.
“There is definitely a lack of office space for sale in the CBD,” said Jeff Horner, property agent at The Property Shop. “Grahamstown is small and people who own property much rather rent it out to businesses. It is a good long term investment.”
“The rent is high,” said Dawn Long of Reddits Book and Coffee Shop on New Street. “We are paying Jo’burg prices on a Grahamstown property,” she added. Long said that they recently moved premises for cheaper rent.
Brian Peltason runs the Old Gaol Backpackers on Somerset Street. The property is a 182-year-old heritage site that he hires from the South African Heritage Resources Association (SAHRA) which is a government department.
“It takes forever to process anything because of these bureaucratic structures,” said Peltason. “The maintenance of the building is actually the responsibility of SAHRA but the processing of things is way too slow so you end up doing the maintenance yourself.”
Grahamstown is an historic town and is dotted with properties that have heritage site status. Peltason explains that this restricts business owners from making certain important renovations to the properties.
Zoning schemes are imposed by the Provincial Legislation but administered by the municipality. Applying for rezoning is a lengthy and inefficient process. A farm owner who wished to remain anonymous said, “I have been waiting to get my property rezoned for months. They are constantly sending out officials and the paperwork never ends. I want to turn my property into a business but because it is taking so long, I am forced to sell and start elsewhere.”
The process is not only inefficient, but expensive as well. “They expect me to pay over R800 for 10 hectares plus another R150 for every hectare after that. It seems like the council does not want local business to thrive in the area. You can only get rich if you are rich already.”
Rumours of a new shopping centre behind Clicks and Woolworths gave some hope to those searching for shop space, but the obstacles of rezoning the property were too much for developer Rob Beer.
“The thought of going through the rezoning process again made me nervous and was too high risk,” said Beer in an interview with Grocott’s Mail last month.
Beer, who owns Pepper Grove Mall, has been building an upmarket mall called Plum Tree Mall since the end of June this year. The drive-thru KFC in the new mall is expected to open in December, but other shops will only be ready in March next year.
“I have been trying to find a shop but there is nothing available,” said a businessman from East London who wished to remain anonymous. He has stores in the new Hemingway’s Mall and the Vincent Park Mall in East London. “Finding shop space in Grahamstown is harder than I would have imagined.”
An estate agent who also wished to remain anonymous believes that commercial property in Grahamstown, like residential property, is controlled by syndicates that have bought up most of the town.
“If anything does come up for sale, before we even know about it, somebody in the know has taken it,” he added.
