PGP has just been awarded exclusive marketing mandates for two prestigious new residential developments in sought after locations in Umhlanga.
Says Schenk: “Conventional wisdom relative to cycles in the real estate market suggests the start of a property market recovery is characterised by some or all of the following factors: low values, a decline in foreclosures, some easing in credit availability, low turnovers and a shortage of stock, and a pent-up demographic demand.
“In my view residential property, especially in the areas of the ‘golden triangle’ of the Western Cape, North Durban/Umhlanga and Johannesburg display all these characteristics. In La Lucia, Umhlanga and Umdloti particularly property prices are in most cases well below their new equivalents. Banks are finding value more readily and credit is easing, albeit at a gradual pace.”
Schenk says researchers in the United States describe a number of overlapping cycles in the real estate market, with shorter cycles of three to five years, and longer cycles of nine to 10 years. In South Africa the market softened during 2008/9, but more recently has displayed the green shoots of renewed growth. Over the longer term, changes in demographics and consumer buying power are major drivers of the property market. It is a combination of these factors which is fuelling the demand for property in areas such as Umhlanga and Umdloti, especially following several years of muted developer activity and rapid growth in the Ridgeside/Gateway area of Umhlanga.
In Ridgeside on Umhlanga Ridge, more than 220 000sqm bulk commercial property has already been transferred, with large corporates such as Investec, BDO (Accountants & Auditors) and Vodacom recently joining many others on the Ridge, which is set to capitalise on KwaZulu-Natal’s growing economy and expanding trade connections, which are opening up a number of attractive investment opportunities.
In Umhlanga Village, Pam Golding Properties has acquired the exclusive marketing mandate for the ‘Beacon Rock’ development, which is already under construction. This mixed-use project incorporating 68 apartments launches in December 2011 and has universal appeal, with its close proximity to Umhlanga’s main beaches, restaurants and entertainment and sophisticated security features.
The apartments in Beacon Rock are a mix of one, two and three bedroom units, with residents having access to a protected landscaped courtyard and pool area. Prices start at R1.3 million for a 58sqm one bedroom apartment, with two bedroom units of 122sqm priced from R2.3 million, spacious three bedroom units of 128sqm from around R2.4 million, and four bedroom penthouses of 240sqm and 360sqm priced between R7 million and R10.5 million. Several units have been reserved pre-launch and Pam Golding Properties are predicting a fast sell-out. The development includes a retail component at ground level and four floors of office space.
In the most desirable part of the thriving Gateway node, adjacent to Chris Saunders Park, Pam Golding Properties have been awarded sole mandate for an ultra-luxurious, 68-unit apartment building called ‘The Elements’, which will employ ‘green’ technology to minimise its carbon footprint. Says Schenk: “There are one, two and three bedroom apartments of varying configuration, from 50sqm to 108sqm in size and priced from under R1 million. Launching to the market in early 2012, the block includes two exceptional penthouses priced at R3 million and R4 million. The units in The Elements will appeal to the ‘live, work, play’ culture and also be ideal buy-to-let investments,” he says. The ground floor of the four storey building comprises very appealing garden units and 500sqm of light retail/offices.
Adds Schenk: “It is no coincidence that two highly respected developers – one part of a large Gauteng group – have chosen Umhlanga as an investment destination. Umdloti too is no longer living under the shadow of its supposedly more illustrious neighbour. The advent of the King Shaka International Airport and the busy Dube Tradeport has revitalised the area leading to a strong increase in demand. PGP recently concluded a sale in the 30 Degrees apartment block for R9.5 million, a record for Umdloti, overtaking the previous highest price of R4.6 million for an apartment. On the drawing board by the Liviero Group, the same developer as 30 Degrees, and set to be launched through PGP in early 2012 is an exclusive block of six luxury apartments located in a quiet area of North Beach Road.
“With world markets still unsettled and the threat of a ‘double dip’ in Europe, equity markets remain nervous and even the gold price seems to lack direction. There are however pockets of renewed growth in property – for many the only trusted hard asset - where oversold positions and demographic shifts have fuelled demand. These areas include the east coast of the United States and London and the south-east part of the UK. I believe the same dynamic, coupled with additional local features, is set to drive the Umhlanga and Umdloti property markets for the next decade and beyond,” he says.