Buyers love to be beside the seaside
Property sales at Cape Town’s iconic V&A Waterfront are reliant on strong retail sales, writes Anna-marie Smith
SEVERAL factors lie at the core of local and global investor confidence at the Victoria & Alfred Waterfront — such as exceptionally strong retail sales during the past six months, showing growth at 18% as reported by Statistics SA.
Investors are lured by constant growth in retail trading, solid property management, a good tenant mix, low vacancy rates and long-term capital growth. Residents are assured of privacy and security, convenient access to retail and entertainment facilities amid spectacular surroundings.
This unique location assures tenants of high foot traffic, and visitors in excess of 23-million per annum, 60% of which are South Africans. Commercial property industry leader Growthpoint Properties’ investment into this mixed-use development of a 50% ownership totals about R4.9bn, where tenants range from retail operators occupying more than 450 upmarket stores, 10 hotels with four- to six-star ratings, ample A-Grade office space, as well as industrial sites.
Residential tenants, owners and holiday makers enjoy an exclusive lifestyle, in a combination of properties ranging from penthouses, to two, three bedroom and studio apartments.
Real estate professionals are noting various property trends related to demand for different products. Basil Moraitis, Pam Golding Properties’ area manager for the Atlantic Seaboard, says: “Pam Golding Properties has noticed steady demand in the V&A Marina for investment prop- erty by non-resident buyers. There has also been a considerable increase in the number of international buyers securing investments in this sought-after secure precinct, and buyers from KwaZulu-Natal and Gauteng also continue to be active in this market.”
Moraitis says while the front row of the Marina, comprising apartments on the water’s edge with views across the yacht basin, has always been the most soughtafter position for V&A buyers, Pam Golding Properties has recently experienced increasing demand from buyers for apartments located exclusively on the canals. An example, he says, was a recent sale concluded for R25m to an international buyer who insisted on viewing penthouse apartments only on the canals.
“In line with this trend, we are experiencing strong demand for all apartment types, starting from about R4m for studios and onebedroom apartments, up to R70m for super-luxury penthouse apartments,” he says.
Seeff Atlantic Seaboard MD, Ian Slot, says the V&A Waterfront is the country’s best property success story, having delivered exceptional capital appreciations of well over 20% per annum on the resale of properties bought off-plan. He says: “The most popular reason for renting or buying at the V&A relates to the allure of waterside living, as well as the exclusive and secure/private nature of the properties and the fact that the location delivers on the status factor.”
He says it attracts upper income buyers and tenants including celebrities and jetsetters pre- pared to pay a premium of up to 40% to live or own property there. Slot says this location is also popular with foreign buyers from the UK, Europe and increasingly with African buyers, such as a buyer from Africa who paid R55m for a One & Only penthouse.
Ongoing sales activity, albeit at reduced prices compared to listing prices, during the past six months shows the conclusion of 17 residential property sales.
A PropStats report generated for IEASA states the average listing price of the 17 properties sold during the past six months at R12.569m, with the average sales price achieved at R11.246m. The report also shows a 10% average difference between listing amount and price fetched, and 292 as the average number of days a property spends on the market.
When it comes to long-term resale value and reduced sales prices, Bill Rawson, chairman of Rawson Property Group, urges caution to the question of whether the market can expect a revival in top prices in excess of R20m. He says while there is now evidence that prices in upper level property are beginning to stabilise, buying activity at this level is still minimal, with no signs of price improvements in the upper brackets as yet. He says a recent example of the drastic drops which have taken place is an apartment in the V&A Waterfront, currently on the market at R3.95m, sold only six years ago for R7.5m.
He believes high priced property purchases should be made as a lifestyle decision, rather than for short-term profit.
A view of Cape Town’s Victoria & Alfred Waterfront.