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Investing in the Cape’s CBD and the Atlantic Seaboard

Jan 16, 2018 | Property Investment

CHRIS TYSON
Managing director, Tyson Properties South Africa

WHO INVESTS IN THE CBD AND ATLANTIC SEABOARD?
A mix of people: some are investors looking to capitalise on the shortage of property in this area, some are young professionals looking to rent, others have relocated, been transferred or offered new employment. Head office relocation has also played a significant role. This is easier with technology advancements; many CEOs can now work anywhere and most choose Cape Town. There has also been an uptick in overseas investors who see Cape Town as exceptional value for money and view its future positively. Retirement to the Cape has also increased.

WHY ARE THEY BUYING THESE PROPERTIES?
Some investors see it as a long-term personal-use opportunity. Others are simply trying to get into market before it becomes internationally competitive.

IS RESIDENTIAL OR COMMERCIAL MORE POPULAR?
Commercial investors normally attract high cost transactions so the majority of our clients are residential investors looking for their first investment or to grow their portfolio.

WHERE TO NEXT?
We had an amazing year in 2016/2017 – the company grew by an astonishing 49%. Our Cape Town offices played a significant part in this growth with the region now contributing more than 30% of our national revenue. We have another two offices opening this year and a further two next year

NICK PEARSON
Managing member, Atlantic Seaboard and City Bowl, Cape Town

HOW HAS THE PROFILE OF INVESTORS CHANGED OVER THE YEARS?
There has been a steady increase in buyers from other major cities in South Africa, predominantly Johannesburg and Durban. We have also seen the rise of diverse homeowners buying into the middle and upper sector of the market. We experience a range of clients: a mix of Capetonians, investors from up north and some international buyers. Mostly we work with those at the height of their careers.

WHAT IS MOST IMPORTANT FOR BUYERS?
Traditionally it’s location, location, location, however view and lifestyle are also top of our clients’ priority list.

WHAT WAS THE HIGHEST PRICE A PROPERTY FETCHED IN THIS AREA?
We recently sold an R80 million apartment in Clifton, the most expensive sectional title sale ever achieved in the area at the time.

WHAT MAKES IT SPECIAL?
Its exclusive position, with direct access to Clifton 1st Beach.

ARE THERE STILL BARGAINS IN THESE AREAS?
Absolutely, there is money to be made in both developments and renovations. However, it takes a while before people wrap their heads around the price per square metre. Buyers need to be brave and have a good understanding of the market because even the smallest investments start at about R2 million.

JAYSON SPRAWSON
Developments director, Western Cape

HOW IS THE CITY’S SKYLINE GOING TO CHANGE IN THE NEXT COUPLE OF YEARS?
Cape Town’s Atlantic Seaboard, City Bowl and Foreshore is fast becoming the Monaco of Africa. Densification is a reality so you will see more architecturally impressive high-rise buildings jutting into the Cape Town skyline.

WHAT IS THE MOST SOUGHT-AFTER PROPERTY TYPE IN THE CITY CENTRE?
Investors search for modern apartments to use when they visit Cape Town. These must ideally be in a development that allows short-term letting so that it can generate an income for the client when it is not being used.

ANY TIPS FOR INVESTING IN COMMERCIAL PROPERTY?
A first-time buyer should seek advice from a property broker who has the client’s best interests at heart. Research your new environment thoroughly. It is standard practice to insert a clause into your sale agreement contract which gives the purchaser the right to perform a proper due diligence within a reasonably acceptable period. Make sure you seek good council on what a proper due diligence should entail.

WHO BUYS IN THE CITY?
Investors looking to make a great return through short-term rental incomes and long-term capital growth as well as young professionals and entrepreneurs who want to live, work and play in the Cape Town city centre and Foreshore.

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