Big city life lures foreigners
Owning a pied-à-terre in Cape Town’s City Bowl is in vogue with foreign investors, judging by the rapid take-up of residential units by offshore buyers in what is soon to be the Mother City’s tallest building.
More than 90% of the 44-storey Zero2-One Tower, a R1.5bn mixed-use development in the CBD, has been sold offplan, with more than a third going to international investors, says Stuart Chait, executive chairman of the developer, Land Equity Group. “Foreign investors are mostly from the UK, Switzerland, Germany, the Netherlands, France and Italy.”
Chait says offshore investors are drawn to mixed-use developments as they are “alive” all day and provide a “live, work and play” lifestyle in a secure environment.
Construction on the building is set to start next month.
Chait says a number of millennials are buying apartments in the City Bowl with the intention of spending half the year in Cape Town and the other half in Europe. “A lot of them are cash buyers,” he says. Land Equity Group has noted an equally strong uptick in demand in recent months from foreign investors at some of its other Cape Town developments, including The Iron Works, a 140-apartment block in Woodstock, and The Docklands, a 134apartment block in De Waterkant that sold out to co-developers before being taken to market.
Meanwhile, most of the 170 apartments that form part of the newly opened Radisson Blu Hotel & Residence, Cape Town, in Riebeek Street have also been sold. Previously known as Safmarine House, the former office building in the heart of the city has over the past 18 months been transformed by developer Signatura and landowner Stonehill Property Fund into one of Cape Town’s most luxurious hotel and residential developments.
Floors one to 11 form the Radisson Blu Hotel, and floors 12 to 23 will house up to 170 one- and two-bedroom (40m²-88 m²) sectional title apartments. This section includes seven 97 m²-214 m² penthouses, and three three-bedroom penthouses of up to 290 m².
Bigger is better in retail
Larger malls are still outperforming their smaller counterparts, latest retail sales figures from Broll Property Group show. In fact, regional shopping centres sized 50,000 m²-100,000 m² are recording the best trading density growth (sales/m²) figures of all types of centres, according to the Broll Retail Snapshot Q4: 2016 report.
The report shows regional and small regional centres (between 25,000 m² and 50,000 m²) were the best performers during the December period, recording growth of 7.9% and 6.1%. Community centres (12,000 m²-25,000 m²) were the worst performers, posting a drop of -0.8%, while convenience (less than 6,000 m²) and neighbourhood (6,000m²-12,000 m²) centres recorded trading density growth of 4.2% and 3%.
Broll’s divisional director for research, Elaine Wilson, says December is a busy period for the retail market, with consumers likely to spend more. “Regional and small regional centres offer an overall shopping experience with access to various retail offerings under one roof, hence these centre types tend to have an increase in sales during the festive period.”
According to Statistics SA, at current prices, retail trade sales in December 2016 amounted to R108.862bn, up 0.9% from R100.307bn year on year.
The Broll report shows general dealers performed exceptionally well in convenience centres, recording growth of 22.3% compared with 7.1% and 7% at regional and small regional centres.
“That may well be as a result of the convenience and ease of access on offer in these smaller centres, which have become important factors to time-strapped consumers,” says Wilson.
Meanwhile, the food and drink category was a top performer at small regional centres, posting year-on-year sales growth of 11.8% against convenience and regional centre growth of 9.5% and 3.6%.
Cape Town still on the up
House prices in Cape Town are still rising at a faster pace than those of the rest of SA. FNB’s latest housing data shows that in the fourth quarter of 2016, the estimated average house price growth rate in the city remained in double-digit territory — to the tune of 13.2% year on year, compared with less than 5% in most other cities.
FNB’s new set of price indices for key subregions in the city shows that the topperforming areas are generally those located near Table Mountain.
The strongest year-on-year growth (22.9%) was on the Atlantic Seaboard. The City Bowl was not far behind, with a fourth-quarter year-on-year house price growth rate of 20.1%. The so-called “city near eastern suburbs”, which include Woodstock and Salt River and stretch east as far as Pinelands, showed 15.8% growth, while the southern peninsula suburbs of Fish Hoek, Kommetjie and Simon’s Town achieved the fourth-best growth in Cape Town and surrounds, at 14.7%.
One of the penthouses at the newly opened Radisson Blu Hotel and Residence Cape Town.