The ups and downs of rezoning applications

As urbanisation drives densification of South Africa’s major cities, influenced by factors such as transportation infrastructure, economy and population growth, there is an increased demand for commercial and mixed-use properties.

“Property developers may spot an opportunity to extract value from a property but need to change its zoning first,” said Broll Auctions and Sales CEO, Norman Raad. Sub-dividing a large property in a popular area is also another way of putting an investment to work.

Changing a property’s zoning is a complex process which can take a number of years and involve several professional consultants. “Town planning regulations also differ between municipalities, making this an onerous process, and for this reason, properties which are already rezoned or have business rights in place garner more interest from prospective buyers.” However, changing market conditions and factors such as the increased work from home trend mean that a potential rezoning could make strategic sense.

“There is a need to weigh up the pros and cons of changing a property’s purpose to a different one than it is currently zoned for. In some cases, playing the long game can reap future benefits.”