Steady demand for city apartments

Recent announcements of extensive new investment in the Cape Town city centre are a welcome shot in the arm for the local property market.  So says Pam Golding Properties’ area manager for the City Bowl and Atlantic Seaboard, Basil Moraitis, who believes the billions of rand invested in new projects are already boosting positive sentiment.  The result is a steady demand for both the purchase and rental of apartments in the central city area.

“There has been a flurry of good news in recent months about extensive urban regeneration projects planned for this area,” says Moraitis.  “These range from plans to double the size of the Cape Town International Convention Centre by adding another 10 000sqm and linking it to the Artscape Theatre precinct, to plans to build a new hotel and shopping precinct around Cape Town station.  Another major project is the new development close to Parliament, which will include close to 10 000sqm of retail and parking space in its first phase, with residential elements aimed at young city workers and possibly MP’s to follow in the later phases.”

“Perhaps the most eye-catching of all,” Moraitis continues, “will be the new Portside building, which at 139m in height will be the tallest building in the city when it reaches completion.  Its 32 storeys will provide office space for some 3000 people, including the provincial headquarters for FNB/RMB/Wesbank.  This R1.6 billion investment by Old Mutual and FirstRand is a very visible indication of optimism in the future of Cape Town’s central city by two of the country’s most significant and credible organisations.  It is sure to draw more demand for accommodation in the central city, and particularly in the Foreshore financial district.”

Recent sales of apartments in the central city have been steady, with PGP reporting particular interest in Mutual Heights in Darling Street and Perspectives in Roeland Street. Buyers include predominantly young professionals working in the central city, for whom the ease of access to work is a major factor, as well as the vibrant lifestyle they can enjoy in the local coffee shops, restaurants, bars and boutiques.  “Communal facilities such as gyms, pools and 24-hour security only add to the appeal of these buildings,” says Moraitis.

Some of the notable sales concluded by PGP between May and July 2011 were:
  • R1.87 million for a 104sqm two-bedroomed apartment in Cartwright’s Corner, Adderley Street
  • R1.1 million for a 57sqm one-bedroomed unit in The Kendall on Wale Street
  • R960 000 for a 66sqm two-bedroomed apartment at Perspectives in Roeland Street

On the rental front, PGP’s rentals manager for the Cape region, Dexter Leite, says the highest demand at present is for long-term, unfurnished apartments.  “There is a serious shortage of stock in this category at present,” he says, “possibly as a long-term result of the World Cup last year.  Many owners furnished their apartments in the run-up to the event, so as to capitalise on renting them out to international visitors.  Now that the tournament is over, the result is an over-supply of furnished stock, and an under-supply of unfurnished units.  Owners would do well to consider removing the furnishings from their apartments and rather offering them for rental on an unfurnished basis, a segment where sustained high demand is shoring up rental pricing.”

Rentals in the city area currently start at around R3 800 per month for bachelor pads and R4 800 per month for one-bedroomed units, going up to around R6 000 in the very heart of the central business district.  Two bedroomed apartments can fetch anything from R6 500 per month to R12 000 per month, or even R15 000 per month for penthouses or those with exclusive finishes.

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