Global demand for Waterfront living
The V&A Waterfront residential stock shortages is evident as cash buyers’ line up for luxury apartments, paying R8m for a two-bedroomed flat.
The V&A Waterfront which is valued at about R13 billion is the icon around which commercial property develops in the Western Cape.
It boasts an assortment of retail, office, hotel and resort-styled residential development set on 123 hectares. It lies on the edge of the harbour and has the iconic Table Mountain as its backdrop.
Co-owned by Growthpoint Properties, the largest South Africa based Real Estate Investment Trust and half by the Public Investment Corporation (PIC), it is a jewel in SA's tourist crown.
Sections of the V&A have gone through extensive redevelopment in recent months. The co-owners are in discussions with a number of international hotel operators to run what will be the first new hotel to be built at the precinct since Sol Kerzner's One&Only opened its doors in April 2009.
The Radisson Red Hotel V&A Waterfront will open in late 2016.
The V&A Waterfront has contributed close to R200-billion to the South African economy over the past 10 years. It announced its 2014 retail results in January, which show an actual year-on-year growth of 19%, slightly down from 2013’s 20%.
Visitor numbers for the year hit a staggering 24-million.
It used to be exclusive to live there but Growthpoint is phasing in more affordable living — And various apartments are now being made available at about R2m each.
"These are for the young up and coming bachelor or bachelorette," Growthpoint Properties director Rudolf Pienaar told SA Commercial Prop News.
He says there is also significant demand for offices in the Waterfront precinct.
Growthpoint is a also platinum founding member of the Green Building Council of SA, a JSE Socially Responsible Investment (SRI) Index company and a Dow Jones Sustainability Index company. Pienaar uses this expertise in green buildings when developing multi star rated properties in the Waterfront.
The demand at the Waterfront is also at the higher income level.
Seeff Properties reports that V and A Waterfront stock shortages are evident as cash buyers’ line up for luxury apartments, paying R8m for a two-bedroomed flat.
Coming off a strong year with sales of just over R480m at an average price of R10.7m, activity at the V&A Waterfront Marina has strengthened further this year with stock shortages now prevalent across the board according to Seeff’s agents for the development, Ross Levin and Kim Bailey.
This year, there have already been 16 sales to the value of almost R167m with apartments selling almost as fast as they come onto the market and just about all to cash buyers.
"Where there was a notable oversupply of stock here up to about early last year, most of these have sold and we are in a sellers’ market with buyer demand far exceeding supply," Seeff says.
Seeff closed last year with sales of over R226m including the sale of two top end penthouses at R31m and R32m in December in addition to several R20m-plus sales last year, add the agents.
This year, Seeff agents have concluded sales of more than R66m and the buyers just keep coming, most with cash and paying top prices, say the agents.
"Moving from a position of oversupply, we are now facing severe stock shortages and, for those looking to sell, the time is now, but with the economy in flux, it is difficult to predict that this situation will last for that much longer and those who hesitate too long may well miss the boat to find a buyer and a good price," Seeff explain.
With an average valuation of R8.6 million, the Seeff team has managed to secure full asking price for 99% of its recent sales.
The buying trends are supporting the hotel industry.
"We notice a strong trend of visitors to the country choosing to stay at one of the closely situated hotels, falling in love with the lifestyle and then choosing to invest in a home that duplicates their holiday experience.
The bulk of our buyers remain South Africans who are especially drawn by the top security and proximity to the five-star retail and restaurant facilities," Mr Levin says.
Meanwhile, the green awards are being granted to the Waterfront.
In a double coup, the GBCSA earlier this year awarded both Victoria Wharf and the property’s BP Building 4-star ‘Existing Building’ ratings, reflecting the buildings’ high-level environmentally friendly and sustainable operating efficiency.
Victoria Wharf and the BP Building join the Silo District’s No. 1 Silo, which was awarded South Africa’s first ever 6-star ‘As Built’ rating last year, making the V&A Waterfront the greenest precinct in Cape Town and also Africa.
“Sustainability is an integral part of operations at the V&A Waterfront, and we are committed to leadership in sustainability practices in both our future and current development plans. We are thrilled with the addition of Victoria Wharf and the BP Building to our green-rated buildings because we believe it shows follow-through on our environmental promises, and our genuine commitment to leaving a sustainable legacy for future generations,” said David Green, CEO of the V&A Waterfront.
The V&A Waterfront’s Victoria Wharf, which houses the bulk of retail trade at the Waterfront in 70 000 m2 of floor space, was also the first shopping centre in South Africa to be awarded a 4-star green rating.
The 9 000 m2 BP Building was the first commercial-scale office development in Cape Town that consciously used green building principles in its design and construction.
The green-star ratings will be valid for three years before the GBCSA’s assessment must be repeated to ensure the sustainability practices have continued and that they are still representative of top standards prevailing in the country.
The GBCSA’s ratings are determined by a building’s performance in a nine categories.
These are indoor environmental quality, management, energy, transport, water, materials, land use and ecology, emissions, and innovation.
Categories are sub divided into credits, which address the initiatives put in place to improve a building’s environmental performance.
Victoria Wharf was awarded 53 out of 59 potential points, leading to its 4-star rating. Not to be outdone, the BP Building received 45 out of 49 points, which also led to its new 4-star rating.