The Atlantic Seaboard: a magnet for apartment developments
Category Industry News
After five years of muted development activity in Cape Town’s swanky Atlantic Seaboard, property developers seem to be back in business. This has resulted in the area becoming a hotbed for residential real estate investments.
Cranes are multiplying in the Atlantic Seaboard, with a number of luxury apartment buildings springing up and already fetching hefty valuations.
Recent sales in the area’s suburbs such as Bantry Bay, Clifton, Fresnaye and Camps Bay, continue to position it as prime residential real estate.
Well-heeled buyers are apparently prepared to fork out up to R100 000 per square metre for an exclusive sea-facing apartment.
If all sales are taken into consideration, sectional titles at the Atlantic Seaboard on average still fetch a cool R85 000 per square metre, says Basil Moraitis, area manager for Pam Golding Properties in the City Bowl and Atlantic Seaboard.
The pent-up demand and stock shortages in the area are a positive spin-off for property values in the area. “In fact in the last 15 years stock shortages have not been like this. People are now competing for the same properties,” Moraitis explains.
Even the capital growth of properties in the Atlantic Seaboard continues to outperform many areas in Cape Town. Pam Golding chief executive Andrew Golding says over the past 12 months the Atlantic Seaboard has managed to consistently outperform, with house price growth of around 25%.
Seeff Property Services chairman Samuel Seeff paints a similar picture saying suburbs in the area like Bantry Bay, Camps Bay, Clifton, Fresnaye, Sea Point, and Hout Bay are high demand areas where “we are still seeing good price growth.”
The growth on Atlantic Seaboard properties comfortably trumps the national house price growth for 2015, which Seeff expects to be 7%, down from 2014’s 10%.
Developers are tapping into the attractive property fundamentals of the area by launching high-rise apartment schemes. In Sea Point, property developer Blok is bringing 22 one-, two- and three-bedroom apartments called TWO16ONHL. The apartments, targeted at first-time buyers, are selling from R2.2 million and occupation is scheduled for 2017.
COO of Prime Residential, Blok and Prime Letting Joel Rosen says the investment case into the Atlantic Seaboard is strong. When the company launched its first scheme in 2012 apartment valuations were between R25 000 and R35 000 per square metre, but the latest schemes are launched at R40 000 to R80 000 per square metre.
“Buyers are not slowing down even with the shortages of apartment units. The supply of planned apartments is already selling quickly,” says Rosen.
Blok has another five apartment schemes across Green Point, Bantry Bay, Fresnaye and Sea Point. Four of the apartment schemes are already sold out. The company is on track to launch another apartment scheme in 2016.
In proximity to the V&A Waterfront, Amdec Property Development launched the R1.2 billion mixed-use development called The Yacht Club in September, boasting 170 apartment units, office space and a 160-key hotel by an international group.
Apartments range from R2.4 million for a one-bedroom unit, up to R4.5 million for a two-bedroom unit. On a rand-per-square-metre basis, apartment units at The Yacht Club translate to around R45 000 to R54 000.
Moraitis, who is responsible for marketing the development, says its going rate is not high for the area. “It sits in perfectly with what has been achieved in the area.” The development is expected to be completed in mid-2017.
Another player gung-ho in the area is heavyweight Growthpoint Properties, which co-owns the V&A Waterfront with the Public Investment Corporation. After launching two residential developments, Ports Edge and Breakwater, the company is adding more upmarket apartment stock.
About 77 apartments are planned at Silo 3, the final phase of the V&A Waterfront’s Silo district. Growthpoint CEO Norbert Sasse says the apartments would be priced from R2.5 million to R10 million. Penthouses would fetch more than R10 million.
Author: Ray Mahlaka from Moneyweb
