A tale of two cities
The city centres of Cape Town and Johannesburg each present unique residential opportunities. From the perspective of two young investors, we look at what these burgeoning areas have to offer
Ockie Oosthuizen is a 32-yearold single man who manages a portfolio of properties and wine estates around Stellenbosch. Although he had a flat in the area, he felt there wasn’t much for him to do in the “family town”, so he started a hunt for somewhere to live near Cape Town’s CBD. He settled on a four-bedroom, 360m2 apartment in Sea Point, letting out his flat in Stellenbosch. “There’s just more going on here for younger people,” he says. “I commute every day between Cape Town and Stellenbosch, but it’s worth it because I get to live where there’s more to see and do, and of course there’s the beautiful scenery.” In Cape Town, Ockie visits fi ne restaurants and participates in sporting activities such as paddle skiing or hiking on the mountains. Over the weekends, he enjoys the easy access to the Constantia Winelands or walks on Table Mountain. “Everything’s just around the corner; there are so many options,” he says. “It’s an incredible lifestyle.”
Ockie is just one of many affluent individuals who are giving up life in Cape Town’s suburbs – or further afield – to experience the social, sporting and cultural benefits of living in the city centre. “These days, everybody wants to live in the city. Our agents report that any well-priced property attracts attention,” says Billy Rautenbach, sales director at Seeff Atlantic Seaboard and the City Bowl. “The urban village vibe here is hip and happening. Real estate in the area now ranks among some of the most sought-after and valuable in the city – and the country for that matter.” He adds that Cape Town is a well-managed city with plenty of green areas and clean, relatively safe streets where residents can walk, cycle or take a MyCiti bus. The V&A Waterfront, the most visited landmark on the African continent, is nearby and all this is in the shadow of the World Heritage Site, Table Mountain
The area is even attracting families – not your typical CBD resident – with the proximity of excellent schools being a significant drawcard. “The residential market has grown from about 750 people a decade ago to more than 7 000 residents. Today, a high-quality unit in a city apartment complex can sell for a median price of R50 000 per square metre,” says Laurie Wener, Pam Golding Properties’ senior executive for developments in the Cape. “People are looking to upscale, even in the upper-income brackets, partly because of soaring utility costs.” She says that smaller lock-up-and-go properties allow households to lower their overheads, notably rates, maintenance and security. Fortunately, for would-be Cape Town CBD residents, there are several new and mixed-use upmarket residential developments underway that will meet the growing demand, including 16 on Bree and 117 on Strand.
OCKIE OOSTHUIZEN: The 32 year old lives in Sea Point near the Cape Town CBD because of the beautiful scenery and lifestyle
And there is still significant development and progress around the CBD and downtown areas including the Waterfront and Silo precinct.
“Buyer interest in sophisticated, stylish living with excellent security and the benefits of a mixed-use development shows no sign of abating. Property prices in the CBD continue to escalate as the demand for urban living prevails,” says Laurie. According to Property24, the average price of apartments in the city centre in 2015 was R967 000. This has doubled in the past two years, with the average price in 2017 already at the R2.15 million mark. This translates into positive real estate activity. Laurie says that most properties sell within about 30 to 35 days for within about 5% to 7% of the asking price. While property price growth means that buying into Cape Town’s inner city is no longer an entry level exercise, for those who can afford the prices, the demand isn’t going to be slowing any time soon – even, says Billy, with the slightly dampening effect of the economic climate. “All in all, you cannot go wrong with an investment in property in the CBD, City Bowl and surrounding areas. These have shown their capital strength and you will no doubt benefit from above average growth in the years to come,” he says.
CAPE TOWN CBD IN NUMBERS
15.05% – The percentage that average sales increased by in 2016
228 – The number of residential units sold in 2016, up from 185 in 2015
R33 921m2 – The average rand per square metre value of apartments in the Cape Town inner city
Source: Central City Improvement District’s State of Cape Town Central City Report of 2016
Mixed-use development 117 on Strand in the Cape Town CBD supports the city’s strategy for densification of the inner city. It has a health club, residential, retail and office spaces, and apartments selling from R2.27 million to R14.15 million; the kitchen in one of 117 on Strand’s apartments
“Living in Maboneng is about being close to work in a safe environment, proximity to people and being able to hide awasy when I need to” – Hayleigh Evans, Maboneng resident
JOHANNESBURG’S CBD ON THE RISE
Things are a little different in Johannesburg. While pioneering developers and residents are flocking to pockets of progress in certain areas of the CBD, it is not yet offering the desirability or returns of the Cape Town inner city. However, a significant drawcard is living where the action is. Hayleigh Evans co-owns the Pop Art Theatre in Maboneng, the thriving development attracting attention as a blueprint for inner-city regeneration. She moved to Maboneng in the early stages of its development in 2010, going to the odd audition during the day and waitressing at night. “That’s where I met Propertuity CEO and developer Jonathan Liebmann, who offered me a part-time job as the brand and cultural manager for Maboneng. I accepted,” she says. Part of her job was to create cultural events and spaces to encourage people to come to Arts on Main and Main Street Life, the two earliest focal points for the development. Out of that, she eventually launched Pop Art, which ultimately became her fulltime job.
Being so committed to the area, she bought a recently developed residential apartment in 2011. “I could see their vision but I didn’t ever imagine it was going to be as huge as it is now or happen as quickly. I bought into the long-term vision but that wasn’t the main thing that guided my choice of a property – it was more about resonating with the vibe,” she says. Hayleigh’s apartment is 45m2 – tiny, but it has the biggest balcony in the building, which she has enclosed to increase her space. The interior is double volume with a 5m-high ceiling, so she has put in a mezzanine made of scaffolding to increase the square footage. “I bought off plan and asked for the fittings to be left out because I had a big idea of what I wanted to do with it,” she says. She bought the apartment for R450 000 and although she hasn’t had it formally valued, similar apartments in the area are currently selling for R900 000. She loves it here. “Living in Maboneng is about being close to work in a safe environment, proximity to people and being able to hide away when I need to,” she says. “There’s an entire world downstairs if I feel lonely. I eat mostly at restaurants rather than cook and any night I want to do something, I just Google what’s on at the Bioscope or find out if there are any other events happening.” She says when she fills out forms and lists her address, people always respond, “oh cool!” And because her apartment is in such a vibey part of the city, when she’s in Cape Town for shows, she lets it easily on Airbnb to cover her costs.
HAYLEIGH EVANS: This Maboneng resident loves living in the vibey Johannesurg precinct for its proximity to work and inner-city life
People are flocking to Joburg’s inner city. Once a no-go area, pockets are now being regenerated, in the process changing the face of the city; Maboneng, a precinct on the eastern side of Joburg’s business district, is a hub of culture, business and lifestyle with retail stores, entertainment venues and eateries mixed with residential, office and industrial spaces
This was Jonathan’s vision. After travelling around the world, the young entrepreneur returned to Johannesburg and felt that the comfortable and vibey inner cities he had seen were sorely lacking in his home town. “The only people using the inner city were of a lower income, so my idea was to try and introduce a more diverse mix of people.” Jonathan thought big from the start, focusing on creating a cultural space and accommodation, rather than only low-cost housing like other developers. “Prices in the city make for good, affordable accommodation, but it’s important to introduce a mix of options,” he says. “I wanted people to integrate and become part of a seamless society, addressing the disparities of income that are the cornerstones of the socioeconomic crisis in this country.” Arts on Main, a gallery and workshop space where artist William Kentridge works, was the catalyst, but Jonathan has continued to welcome galleries, hotels, theatres, shops, accommodation and restaurants to the area. One of Joburg’s leading chefs Dario d’Angeli moved his Cube Tasting Kitchen into the heritage Cosmopolitan Building in the heart of Maboneng. Jonathan’s precinct isn’t the only reclamation attracting attention. Other players are also carving out their own segments of the city, such as Urban Ocean. This developer owns 11 buildings along Commissioner Street between Rissik and Simmonds Streets.
JONATHAN LIEBMANN: The Propertuity CEO and developer wants to attract a diverse group to Johannesburg’s inner city
Again, they have understood that creating liveable spaces in the city is not just about places for people to live, but also places for them to visit and play – and to create a sense of community. This area in particular is boosted by its proximity to the commercial centre of the CBD where the banks and mining houses still have their headquarters – and around a hundred thousand people come to work every day in high-paying jobs. For these reasons, says CEO Herman Schoeman, they have created a co-working space called Urban Collective, coffee shops, a pop-up arcade for fashion designers, and a number of other ventures, including signing up two non-profit companies – We-Think-Code and Digital Academy – to prepare students for coding jobs. One of their flagship projects is the City Central Food Hall, where pop-up wagons create fresh food for corporate customers. “We need to bring the lifestyle element back,” says Herman. “We want to go a little more high end in this part of town because we’re in the financial district – so we’re not only appealing to hipsters but finance workers and government employees as well.
We’re hoping that they will start walking from their offices to support these initiatives, so they aren’t just weekend destinations for people out of the area – they will also work during the weeks.” He says that units in The Franklin, which Urban Ocean developed, were letting for between R6 000 to R7 000 five years ago. Similar 61m2 units now go for around R9 000 to R9 500, unfurnished. An upcoming residential development with 60m2 units will be letting for R8 000 per month. “We believe that there is a huge demand for residential leasing stock in the area,” he says. “We’ve been attracting more and more interest from various businesses previously located in Sandton, Rosebank and other more northern suburbs due to our competitive office rentals.” While it’s difficult to put a figure to the returns offered by investment in the Johannesburg CBD because its upliftment is new and ongoing, one thing is certain. Because it’s coming off a low base, there are great opportunities for those willing to participate in the renewal.
“Prices in the city make for good, affordable accomodation, but it’s important to introduce a mix of options” – Jonathan Liebmann, Propertuity CEO and Developer
Maboneng is popular for its decent, affordable accommodation and the increasingly diverse people moving to the area; this inner-city precinct includes coffee shops, co-working spaces and gallery Arts on Main
JOBURG CBD IN NUMBERS
R6 000 – The monthly rent in 2012 for Urban Ocean’s 61m2 units in the CBD
R9 500 – The monthly rent for the same units in 2017
Source: Urban Ocean
The Cosmopolitan Building, a heritage site in Maboneng, is a gallery space that incorporates design, retail and fine dining, and now includes The Cosmopolitan Bar and the Cube Tasting Kitchen; the driving idea behind Maboneng was to bring life back to the streets, an area residents and visitors flock to for the funky bars and restaurants; developer Urban Ocean’s City Central Food Hall on Commissioner Street was a branch of Barclays Bank in the 1940s. Now the triple-volume marble space is filled with the aromas of fresh coffee and delicious food
Credits: Photographs: Karl Rogers, iStock by Getty Images, supplied, Text: Georgina Guedes