Much growth at prime lo­ca­tion

In­vestor con­fi­dence sees the rede­vel­op­ment of Eikestad Mall in Stel­len­bosch, writes Anna-marie Smith

Business Day - Home Front - - HOMEFRONT -

THE growth po­ten­tial in Stel­len­bosch as a prime res­i­den­tial and re­tail growth node con­tin­ues to lure in­vest­ment in­sti­tu­tions and de­vel­op­ers keen to max­imise op­por­tu­ni­ties for fu­ture re­turns.

Ned­bank Cor­po­rate Prop­erty Fi­nance fi­nanced the re-de­vel­op­ment of the Eikestad Mall precinct, and also holds an eq­uity stake that in­cludes the top end 119 unit Adringa Walk res­i­den­tial fa­cil­ity, com­pris­ing bach­e­lor and two-bed­room du­plex apart­ments.

The five phase multi-pur­pose rede­vel­op­ment project of the Eikestad Mall in the cen­tre of Stel­len­bosch is adding a new di­men­sion to re­tail and life­style fa­cil­i­ties avail­able to res­i­dents in town. In ad­di­tion to the large num­ber of blue chip re­tail and life­style stores fea­tur­ing here, will have multi-level park­ing fa­cil­i­ties for 541 cars.

Mar­keted ex­clu­sively by Pam Gold­ing Prop­er­ties Stel­len­bosch, units are priced from R1.4m for bach­e­lor apart­ments, up to R3.35m for the two-bed­room du­plex units. Pam Gold­ing agent Vanessa John­son says though the of­fi­cial launch of Adringa Walk is only sched­uled to take place in Jan­uary 2014, some units have al­ready been sold.

In­creased de­mand for what has be­come a most de­sir­able yet pricey Boland life­style is more than just fuelling prop­erty prices in Stel­len­bosch. It is also viewed by some as show­ing the early signs of an ar­ti­fi­cial bub­ble. Liv­ing in the cen­tre of this once ro­man­tic univer­sity town is now out of reach for those who missed the prover­bial boat, about 10 years ago. That was when choices of sub­urbs and schools amounted to a mere hand­ful, when prop­er­ties were priced well be­low R2m, and be­fore wealthy fam­i­lies from up­coun­try saw the po­ten­tial of a se­cure high­end life­style near the coast.

One of Stel­len­bosch’s many claims to fame is its pres­ti­gious rep­u­ta­tion as an aca­demic hub that houses top schools, the in­ter­na­tion­ally ac­claimed univer- sity and busi­ness school, Boland Col­lege, as well as var­i­ous de­sign and sport schools. It is also home to the In­sti­tute of Culi­nary Arts, The South African Chefs Academy, The Pri­vate Ho­tel School and gourmet cook­ing schools.

The town’s lo­ca­tion within close prox­im­ity to Cape Town In­ter­na­tional Air­port as well as the city, beaches and en­ter­tain­ment no more than 30 min­utes away by car, is a big draw card. Prop­erty agents say a grow­ing trend is seen in well heeled res­i­dents from up­coun­try re­lo­cat­ing to pri­vate es­tates while bread­win­ners com­mute be­tween cities.

Prop­erty pro­fes­sion­als in Stel­len­bosch say that Stel­len­bosch’s so­phis­ti­cated high end life­style is sought af­ter by res­i­dents of all ages, in­clud­ing priv­i­leged students whose par­ents fi­nance their ter­tiary stud­ies, ac­com­mo­da­tion and spend­ing habits for any­thing be­tween three to five years. In some cases par­ents pur­chase prop­erty to rent prior to their chil­dren ini­ti­at­ing their stud­ies, since typ­i­cal sea­sonal rentals of 10 to 11 month pe­ri­ods pro­vide steady rental in­comes.

Com­ment­ing on the re­tail and res­i­den­tial prop­erty ex­pan­sion of Stel­len­bosch is Jo­han Hugo of Raw­son Prop­er­ties Stel­len­bosch, who says lo­cal busi­ness premises such as Techno Park, as well as other large cor­po­rate head of­fices, and con­ve­nient com­mut­ing dis­tances is a ma­jor at­trac­tion to wealthy fam­i­lies. An­other rea­son for ris­ing prop­erty prices he says is grow­ing stu­dent num­bers, who re­quire re­tail, en­ter­tain­ment and ac­com­mo­da­tion fa­cil­i­ties. He says res­i­den­tial nodes about 7km to 10km out­side the cen­tre of Stel­len­bosch such as Klap­muts and Koe­len­hof are see­ing new de­vel­op­ment of pri­vate es­tates fall­ing within more af­ford­able price ranges than those in the heart of town, and some that are sched­uled for next year.

Prop­erty Con­sul­tant Leon Ver­meulen of Se­eff Prop­er­ties in Stel­len­bosch says the mar­ket is priced at a high level, where large three­and four-bed­room prop­er­ties in the older es­tab­lished subur­ban ar­eas are now priced at more than R2m, while only smaller homes in new com­plexes might still come in at less than R2m.

Ver­meulen says an in­creas­ing num­ber of English speak­ing res­i­dents are re-lo­cat­ing to town, mostly re­sult­ing from the large num­ber of ed­u­ca­tional in­sti­tu­tions in the Boland re­gion.

What re­mains an on­go­ing trend here, he says, are fam­i­lies who pur­chase prop­er­ties for chil­dren re­quir­ing stu­dent ac­com­mo­da­tion, with the in­ten­tion of sell­ing for a profit af­ter four to five years. He says be­cause the sea­sonal rental mar­ket in Stel­len­bosch be­comes ac­tive from Septem­ber, with new leases signed and sealed by Oc­to­ber, par­ents usu­ally make their prop­erty pur­chases by mid-year.

Il­lus­trat­ing prop­erty growth in Stel­len­bosch was its top na­tional rank­ing in Fe­bru­ary this year, when De Zalze Golf Es­tate was ranked first in the cat­e­gory of Top Lux­ury In­vest­ment Sub­urb, achiev­ing an av­er­age seven-year yield of 242%. His­toric fig­ures in this Light­stone’s Es­tate re­port re­flected De Zalze’s seven-year his­tory in av­er­age free­hold prop­erty val­ues start­ing at R1m in 2004, reach­ing its peak at R5.9m in 2010, with a drop in value to R5.5m last year.

The Eikestad Mall project in Stel­len­bosch is adding a new di­men­sion to re­tail and life­style fa­cil­i­ties avail­able to res­i­dents in town.

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