South African Property Monthly – September Issue

SEPTEMBER 2012 #82

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MONTHLY

South African property and lifestyle for international investors

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NEWS/TRENDS >>

Cape Town city centre apartments in demand

by STAFF REPORTER Central Cape Town has become a sought-after residential address for young professionals who are drawn to its vibrant lifestyle, modern apartments and convenient location.

Pam Golding Properties (PGP) reports a recent increase in enquiries from buyers aged under 40 – a trend borne out by Lightstone statistics, which indicate that around 30 percent of all recent buyers in this area fall into the age category of 18 to 35, while over 60 percent are under the age of 49.

PGP says the city centre lifestyle is extremely attractive to young people, while the good range of affordable properties makes this an accessible area for first-time buyers.

Basil Moraitis, PGP’s area manager for the City Bowl and Atlantic Seaboard, says the highest demand at present is for two bedroom apartments with secure parking, priced in the R1 million to R1.5 million price range.

There is a good selection of stock on the market at

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present, he says, across all price ranges. And there is excellent value for money on offer - it is possible to buy a bachelor apartment for as little as R600 000, or a large, modern apartment in a new building for under R2.5 million, he explains.

Moraitis says many of the city’s older blocks have been renovated over the past seven years, with upgrades including the installation of new elevators and more modern finishes.

Buildings such as Mutual Heights, Mandela Rhodes Place and Cartwright’s Corner offer superb communal facilities such as gyms, sheltered swimming pools, and 24-hour security, he says.

“Residents can live in comfort and safety in a vibrant, trendy location, within easy walking distance of their favourite cafes, bars and restaurants.”

Moraitis says those employed in the city centre can even walk to work, while the MyCiti bus service provides reliable, affordable and convenient commuting to the V&A Waterfront, the

City Bowl and the Western Seaboard.

With Cape Town being chosen as the World Design Capital for 2014, the spotlight is firmly on this area and its development as a trendy, modern residential node, he explains.

In short, he says, it is a highly desirable place to live for those who want a secure, easy-to-manage lifestyle in a convenient central location.

Anyone seeking proof of investor confidence in the area need look no further than St George’s Mall, where the redevelopment of Newspaper House is fast approaching completion. The historic landmark has undergone a R150 million revamp, due for completion by the end of this year.

Independent Newspapers will remain the major tenant on the upper floors, while developers Ingenuity Property Investments are installing retail tenants on the ground floor – among them a Food Lovers’ Market, a welcome addition to the city for aspirant chefs and ‘foodies’.

- Property24.com

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BAROMETER

Property better than money market

by STAFF REPORTER Property is now a better investment than the money market and most other equities, says Bill Rawson, chairman of the Rawson Property Group.

Rawson says the Reserve Bank’s decision to reduce its repo rate by a further half a percent will speed up the movement of capital from the money market and cause investors to look harder for better returns elsewhere.

This being the case, the logic of investing in property needs once more to be emphasised, he says.

He says the simplest and easiest way to do this is to invest in a Johannesburg Stock Exchange (JSE) listed property fund.

In 2011 these funds outperformed bonds, cash and other equities and are again doing so in 2012, despite the difficulties experienced by tenants.

Rawson says in 2011, average returns on listed property were 8.8 percent and some of the top performing funds achieved returns of 19 percent to 24 percent.

Those investors wanting a more hands-on and potentially more profitable investment should consider investing, either alone or with partners, in commercial property, he says.

Jason Lee, national manager of Rawson Commercial, recently said that his franchisees’ stock

on average gives them an 11 percent rental return and some are achieving 15 percent or 16 percent returns.

Paul Henry, managing director of Rawson Developers, says every one of the 500 residential units brought on stream by his company in the Rondebosch area in the last two years will appreciate by an average of 8 percent year-on-year and are already giving returns of 7 percent.

“This is a better-than-usual performance, based on very careful selection of the site by the developers, but it does indicate how an investor, prepared to do careful homework, can find real value in the property market.”

Quoting Stanlib Property Fund manager, Keillen Ndlovu, Rawson says that a properly managed property investment will always reduce the volatility of a diversified investment portfolio and has the potential to outperform most other classes.

Rawson says properly managing the investment is key and fortunately there are highly reputable, well managed JSE funds and excellent property managers giving a hands-on service.

If the investor takes the right advice from a reputable property group, he can avoid most risks and sleep happily at night in the knowledge that his investment is sound, he adds.

- Property24.com

SEPTEMBER 2012

<< NEWS/TRENDS

Rabie unveils new private label business to revitalise sector

by STAFF REPORTER One of South Africa’s top property entrepreneurs is leading an urban property revival by reinventing older buildings in sought-after areas - especially in the country’s property haven, Cape Town.

John Rabie, the developer of some of South Africa’s most successful mixed-use developments, has taken the wraps off his private label brand Signatura, which aims to unlock new urban lifestyles in SA. Rabie made his mark with the multi-million-rand Marconi Beam development outside Cape Town that rehoused informal shack dwellers and unlocked a new commercial, industrial and residential node, some 20 years ago. He also masterminded Westlake’s visionary residential suburb in the Western Cape, which includes top private school Reddam as well as a commercial and office parks. He was behind the transformation of the Kenilworth race course precinct, which is home to Pick n Pay’s new headquarters, together with the redevelopment of the Milnerton Race Course, into 1 800 world-class residential units and renamed Royal Ascot. Other projects include the Atlantic Beach golf course development on the West Coast as well as the multi-billion-Rand Century City, which is owned

by Rabie Properties, and which encompasses various residential, commercial, leisure, hotel and retail ventures.

Starting out as a quantity surveying student at UCT in the 1970s, Rabie - who remains the non-executive chairman of Rabie Properties is one of the most experienced property players in the country. His career, which spans some 35 years, has involved him in all elements of the property world, giving him the insight to unveil his latest venture, Signatura.

Rabie believes changing lifestyles in democratic South Africa and the global trend towards urban renewal and green living have opened the

SEPTEMBER 2012

way for new thinking in the property world.

“I’ve worked through all the property cycles of the past 30 years and seen many changes, including integration of townships in the wake of apartheid’s demise, the impact of the global financial meltdown, recent legislative changes including the current Consumer Protection Act and a number of top and bottoms of the property market following the recessions of the late 1980s and 2000s.

“When one looks at the logic behind property it’s clear that developments in South Africa will follow those of other major cities like Manhattan, parts of London and Sydney’s Eastern suburbs in the way in which urban spaces are reinvented.

“In South Africa, and especially in Cape Town, we have the added excitement of incredible natural beauty and the slow unbundling of our past separate development, which is why I have decided to launch my new property concept in Cape Town first.

“Signatura is a new-concept private label property brand.

The vision is to handpick unique urban sites in Cape Town for master-crafted urban renewal. Because land within the city limits remains scarce, we have already earmarked a number of existing opportunities and, in keeping with the City of Cape Town’s spatial development framework, will be transforming them to create new-style luxury accommodation and potential commercial spaces that are relatively affordable.”

Rabie believes Signatura is a natural evolution of Cape Town’s property market. Working with an experienced team of topnotch professionals, he has identified a number of prime properties in Cape Town’s most established areas – such as Vredehoek, Tamboerskloof, Greenpoint and Seapoint – for upmarket urban renewal in line with modern 21st century lifestyles.

“Instead of building new homes on greenfield sites

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– which obviously are only available on the city’s outer edges - we aim to meet the needs of a new generation of homeowners who want the convenience of living centrally in this beautiful city.

“The trick when it comes to property is to get the position right and through clever design, both exterior and interior, to recreate the elements that modern buyers demand - such as secure parking and outdoor areas to take advantage of our wonderful climate.

“Added to all this, are high quality finishes and new-age indigenous landscaping to create welcoming spaces such as rooftop or vertical gardens that add green lungs to city living.

“Like the other global cities, Cape Town’s land is very desirable yet limited. Our true inner-city conversion of commercial to residential space has failed because of lack of facilities which make for easy living, but which are freely accessible in areas like Vredehoek, Tamboerskloof and

the Atlantic Seaboard.

“Signatura aims to maximise the use of existing land to limit urban sprawl and to give buyers the chance to live near desirable facilities such as the MyCiti bus route that is being extended to Gardens and the Atlantic Seaboard.

“The local property market is slowly recovering since the 2008 recession and Signatura is well placed to harness these ‘green shoots’,” says Rabie.

“We work closely with the council, bodies corporate, residents and ratepayers to ensure that renewal is as beneficial as possible and that the land is used in line with municipal regulations.”

Signatura’s first completed development is Horizons, a former single dwelling in St James Street, Vredehoek, that has been sensitively developed into four two-bedroom apartments and a penthouse, all with spectacular views of the city. Further projects in the pipeline include opportunities in Seapoint, Greenpoint, Tamboerskloof and two other properties in Vredehoek.

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HOUT BAY

R7 995 000

SANDHURST

SUBLIME LIVING Bedrooms 5 Bathrooms 5 Garages 2 WEB 257055 Architecturally designed contemporary farm-style home set on the mountain ridge with over half an acre of landscaped gardens and river.

[O] +27 21 790 1032 STEPHAN CROSS +27 82 555 5808 houtbay@seeff.com

SOMERSET WEST

R20 000 000

ERINVALE GOLF ESTATE - BREATHTAKING HELDERBERG VIEWS A HOME WITH SUPERB HANDCRAFTED FINISHES AND DETAIL, SIT Bedrooms 4 Bathrooms 5 Garages 3 WEB 272104 Stefan Antoni designed. Perfect for entertaining. Easy to maintain offering spacious open-plan living area with great flow to beautiful garden & sparkling pool.

[O] +27 21 851 4141 LORETTA DIAB +27 82 416 6982 swest@seeff.com

ROBERTSON

R2 550 000 PLUS VAT

Bedrooms 5 Bathrooms 5 Garages 5 Every care has been taken with the finishes in this property, and every convenience installed gourmet kitchen, wonderful entertainment areas, and much more. Landscaped garden has g [O] +27 11 784 1222 GEORGE PAPADOPULOS +27 84 454 1834 | CORINNA LOWRY +27 8

MONTAGU

R1 830 000

VIEWS FOR AFRICA…

A REAL COUNTRY HAVEN…

Bedrooms 3 Bathroom 1 WEB 274221 Spectacular lifestyle farm situated at the foot of the Langeberg Mountains. Consists of 789 hectares of veld & fynbos, old farm homestead and ample water etc.

[O] +27 23 626 6171 POLLA VAN WYK +27 82 711 3330 robertson@seeff.com

Bedrooms 4 Bathrooms 4 WEB 262431 Tucked away in the sought-after part of Montagu, this private residence ensures tranquility & serenity for the selective connoisseur. [O] +27 23 614 3332 PATRUZCHKA MÜLLER +27 72 261 6974 montagu@seeff.com

R26 000 000

PLETTENBERG BAY

R2 200 000

HOME WITH SPECTACULAR VALLEY SCENERY! Bedrooms 7 Bathrooms 5 Garages 2 WEB 272691 With plenty of accommodation on offer, this home would be well suited for a large or even 2 families. Private living areas, a large pool, 2 staff rooms and spectacular valley views. [O] +27 44 533 0311 DANIEL VAN RENEN +27 82 883 6271 plett@seeff.com

ROBINDALE

TUATED IN AN AWESOME GARDEN WITH POOL AND COURT

WEB 273326 d. American shutters, touch-screen automation, Italian floor tiles, imported pool decking, gazebo, ponds and fountains, as well as Jacuzzi, pool and floodlit tennis court .

82 652 8891 sandton@seeff.com

KNYSNA

R1 450 000

R750 000

UPSTAIRS SECURE UNIT! Bedrooms 2 Bathrooms 2 Parking 1 WEB 273175 Situated in a well-maintained complex, this 75m2 unit is in very good condition. Pool in the complex & good security. Buy it as an investment or as a lock-up & go for yourself.

[O] +27 11 476 3536 ANNE GRAF +27 83 285 8314 randburg@seeff.com

WATERKLOOF

R3 950 000

SURROUNDED BY NATURE

SLEEK AND STYLISH DESIGNER HOME

Bedrooms 3 Bathrooms 2 WEB 247531 Tranquil and serene in the Phantom Pass forest. High beam ceilings cover the openplan living, dining and kitchen areas, fireplace, pool & two large decks.

[O] +27 44 382 5919 LIVIANA AUDIBERT +27 82 500 2259 knysna@seeff.com

Bedrooms 4 Bathrooms 4 Garages 2 WEB 262384 Relaxed indoor and outdoor living with good flow to entertainment patio and garden.

All living areas open to the garden/pool. Separate guest suite. SQ, excellent security.

[O] +27 12 452 2500 CORLI VAN HEERDEN +27 72 601 2686 | WENDY HOFFMAN +27 83 266 3799 lynnwood@seeff.com

NEWS/TRENDS >>

ASK THE EXPERT >>

Advantages of buying from a developer

I

am interested in purchasing plots in a new development, but I am confused about building rules and time frames. Is there a standard time for developments to be completed? What are the advantages if I buy from the developer? I know that I will not have to pay estate agent fees, but will I have other additional expenses?

T

SA to boost tourism from the UK

by STAFF REPORTER A pilot project aimed at boosting tourist arrivals from the United Kingdom to South Africa has been launched by Tourism Marketing South Africa.

Tourism Marketing South Africa (TOMSA), the levy collecting arm of the Tourism Business Council of South Africa (TBCSA), has joined forces with South African Tourism on this pilot project.

It entails the appointment of an ‘in market’ sales conversion consultant, who will work side by side with SA Tourism’s UK office to strengthen the promotion and sales of South Africa as a tourist destination.

Former marketing and sales director at Mantis Collection, Sheree Simpson, has been appointed to fulfil this important mandate.

Mmatšatši Ramawela, chief executive officer of the TBCSA, says the project is as a result of constructive engagement with SA Tourism on the need to narrow the gap between raising awareness about South Africa as a destination and converting potential tourists into actual tourist arrivals.

“TOMSA and SA Tourism both agree on the importance

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of looking after the country’s traditional source markets, while pursuing new growth opportunities in the emerging markets,” she says.

Ramawela says the United Kingdom is South Africa’s biggest overseas source market.

The pilot project has two key objectives. One is to complement current marketing efforts from a brand awareness perspective.

The other is to focus our attention on the tourism distribution channel, traditional and new, to ensure that we offer attractive South African packages for the UK market, considering the ongoing economic pressures affecting global travel, she explains.

The announcement of the UK pilot project follows the TOMSA Annual General Meeting held on 26 July, where new members of the board were elected.

They include: Lance Smith, executive director of sales at Avis Car Rental, Franco Jordaan, managing director of Court Classique Hotels, Nic Griffin, chief executive officer of The Thornybush Collection, Alistair Dooley, divisional director of financials at City Lodge Hotels, Dale Pretorius,

marketing manager for Value South Africa, Kobus Tait, chief executive officer of Forever Resorts, Nils Heckscher, managing director of the Winchester Mansions Hotel, Paddy Brearley, managing director of Legacy Hotels and Resorts, Mavuso Msimang, TBCSA board chairman, and Mmatšatši Ramawela, TBCSA chief executive officer.

“This project is another way in which TOMSA is creating value in the travel and tourism industry.”

Ramawela says TOMSA supporters and the broader membership of the TBCSA will see more collaboration with SA Tourism.

Based on the success of this pilot project, there are plans to expand it to other key source markets for South Africa.

In his presentation of SA Tourism’s five year strategic plan and 2013/14 annual performance plan during the TBCSA/TOMSA AGM, the chief executive officer of SA Tourism Thulani Nzima thanked the TOMSA and the broader industry for their continued support of SA Tourism’s work.

He committed to work with both TOMSA and the TBCSA to ensure that the UK pilot project succeeds.

- Property24.com

www.sapropertymonthly.co.uk

he current opportunity across South Africa and specifically along the KZN Dolphin Coast (north of Durban), where several large state-of-the-art gated estates have developed over the past 20 years, is to purchase vacant land, at discounted prices, in the most amazing settings imaginable.

With the recession having impacted many property owner’s ability to build within the typical five-year time frames permitted, the estates have generally either relaxed or completely scrapped this requirement. Some of the well-established estates such as Zimbali Coastal Resort have very few if any sites still available from the master developer and the bulk of the sites on the market are resales.

Our experience however is that the re-sales are in many instances selling at pricing below the first time sale offerings. For other newer estates such as Brettenwood Coastal Estate or Palm Lakes Estate most of the stock available is from the master developers.

All new product provided by developers include 14% VAT and no transfer duty is then payable. For property transactions of vacant land

at pricing below R1.5 million, the transfer duty is however small and not a material consideration.

Developers typically sell their land through estate agents. The transaction fees are paid by the seller and the pricing of land to the buyer does not vary depending on whether an estate agent facilitates the transaction or not. Most estates have once off contributions to a levy stabilisation fund, payable by the purchaser, which ranges from R5,000 to R13,000.

Golfing Estates such as Zimbali and Simbithi provide for membership to their Country Clubs, which have a joining fee attached and an annual subscription fee.

All estates have monthly Home Owners Association levies payable by all property owners. The lifestyle benefits that property owners within gated estates enjoy are exceptional and are the reason for their popularity.

Andreas Wassenaar Seeff Dolphin Coast – Principal Seeff KZN Chairman andreasw@seeff.com www.seeff.com

The KZN Dolphin Coast boasts vacant land at discounted prices.

SEPTEMBER 2012

<< LIFESTYLE

Reclaiming used building materials

by ANTONELLA DESI With the ever increasing cost of construction materials, the wise DIY builder should, whenever appropriate, try to purchase them secondhand. In fact, a surprising variety of materials can be obtained without ever entering a builders merchant or hardware shop.

These range from basic construction essentials like bricks, timber and roof tiles, to indoor materials such as flooring, doors, staircase timbers, fireplaces and decorative accessories.

Some reclaimed materials are much cheaper than their new counterparts; however, others will be a little pricier.

Aside from the knowledge that by using reclaimed materials you are recycling them and in the process doing your bit for the environment, probably the main attraction of using reclaimed items helps to preserve appearance and character when doing renovations on older homes.

The recycling process There is, of course, nothing new in the use of old materials; small tradesmen and builders have always looked out for sound old bricks, timber doors and window frames that can be used again. But in recent years, the process has intensified and more care is now taken to retrieve specialised items, largely because of their increasingly

SEPTEMBER 2012

high resale value.

The recycling chain starts with the demolition contractors. Whenever they put in a quotation for a job, they offer a discount for the “credit” value of the materials.

This means they have a vested interest in disposing of anything they can take out of the building in question. The demolition contractors have a well-developed network through which most of their salvage is disposed.

You should have no difficulty in obtaining weatherproof materials from demolition contractors: bricks, slates, roof tiles, rolled steel joists and heavy timbers are always likely to be readily available.

For more specialised items, you should visit an architectural salvage dealer.

These establishments take supplies of doors, timbers of all kinds, flooring, iron railings, and a whole host of objects, which begin to overlap with the stocks of antique dealers. These might include fireplaces, chimney pots, decorative ironware and antique tiles. Of course, the most valuable items end up with antique dealers.

Searching for salvage Always start your search on the phone – speak to the local demolition contractors and find out what they have. Even if they cannot help you, they will know of builders merchants who deal in salvaged materials, and other dealers

for more specialised items.

Here are a few popular items that can be readily found: • Roofing materials: Slate and old clay tiles are extremely expensive to buy new, and difficult to match up to older roofs, as such they are always in demand. Conversely, modern cement-based tiles are not often kept, as they are comparatively inexpensive to purchase new. When buying old slate tiles, be warned that slate tiles have been made in a bewildering variety of sizes and you must carefully check that a prospective purchase matches your existing tiles.

• Construction timber: Heavy timbers for roofing and joists are widely available – they often have the supreme advantage of being well seasoned, which means they will not crack, warp or contract after installation. At all costs, avoid timber that shows any signs of attack by damp, rot or wood-boring beetles or termites.

• Flooring wood: Floorboards and parquet floor tiles make excellent second-hand buys.

Reclaimed floorboards are particularly suitable in cases where you are repairing a floor. Do not worry too much about superficial damage because you can sand the floors and parquet tiles down and refinish them so they look good as new. But do check that they are not too thin to sand further.

• Other woods: You can reclaim a wide range of

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wooden items for interior purposes – these include wooden banisters, stair rail support spindles, doors and doorframes, moulded wood fireplace surrounds, window frames, and much more.

These items vary immensely in price and condition, and if they have been cleaned up and repaired, their price will reflect this.

• Fireplaces: Fine, ornate fire surrounds in wood, marble and cast iron are popular

items, as are antique stoves.

Period inserts, such as grates and fire baskets, are also available but are usually not sold separately.

Stained glass: Many homes have attractive windows of stained glass, which are sadly dilapidated through breakage and bowing. Often, the problem is simply caused by the drying out of the thin sliver of putty that sits between the lips of the lead surround.

- Property24.com

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