Much growth at prime location
Investor confidence sees the redevelopment of Eikestad Mall in Stellenbosch, writes Anna-marie Smith
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.