KZN FARM SALES NEWSLETTER - JULY 2011

After a slow start the market has perked up and in June 90 properties were transferred in the Registration District FT alone – this in the agricultural / industrial areas (excludes residential). The Midlands market is still very slow with asking prices remaining way beyond what buyers are prepared to pay. In deals transacted the prices are 25-35% off asking prices. Some properties have sold well but in general the market is still very selective and price sensitive.

The recent utterances of wayward aspirant politicians have done nothing to instil confidence in the market but it evident from the recent increase in activity that life carries on.

Timber farms are in great demand but they are tightly held and those that have traded hands are getting good prices. Poorer farms not in rotation and poorly managed are not selling.

The state have purchased many properties – to what end nobody really knows but it has capitalised several individuals who are in the market to replace what they have sold. Anyone with good grazing farms – now is the time to sell.

There is also demand for smaller dairy farms (150-200 cow units) – buyers will pay up to R10 mill for these. Water is of the essence.

Rainbow Chickens are contracting out and this has initiated an incredible scramble for 15 – 50ha units within an 80 radius of Hammarsdale. The properties have to meet many criteria and sales are subject to an EIA but there is no shortage of buyers. Properties within land claimed areas cannot be financed for this project.

Properties in the Cato Ridge, Camperdown and Umlaas Rd area are sought after but zoning is an issue. Most of the buyers want land for transport related activities. A notable purchase of R34 million on the Abattoir Rd for 20ha indicates good things for the future. The development of the corridor is starting to happen with development applications being recently granted – Afroprop at Umlaas Rd and Lynnfield Park, Lovemore Brothers at Umlaas Rd. There has also been recent interest from Chinese investors in this area.

The market is still very much in the buyers favour so now is the time to buy if you are looking to get in.