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Moderately priced Atlantic Seaboard apartments stack up

In an area recording high apartment valuations.
The Yacht Club is a mixed-use development near the V&A Waterfront.

Cape Town’s affluent Atlantic Seaboard is known for properties fetching hefty valuations and in some cases setting records for property sales.

Recent sales in the area, including suburbs such as Bantry Bay, Clifton, Fresnaye and Camps Bay, continue to position it as prime residential real estate.

Valuations of sectional titles in the area are a case in point. Sea-facing Clifton and the V&A Waterfront’s front yard basin are no strangers to commanding apartment values of up to R100 000 per square metre.

If all sales are taken into consideration in both areas, sectional titles 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.

Property fundamentals in the Atlantic Seaboard can be ascribed to high valuations. Moraitis says there is pent-up demand and not enough stock in the area, which is having a positive spin-off for property values.

“In fact in the last 15 years stock shortages have not been like this. People are competing for the same properties,” he says.

Industry players say that the Atlantic Seaboard has recorded a surge in property values in the last four years, of up to 25% per annum.

In recent months, there seem to be more property developers launching sectional titles that are moderately priced.

Among the developers that are courted by residential projects in proximity to the V&A Waterfront is Amdec Property Development, part of the Amdec Group. The property development company on Wednesday launched the R1.2 billion mixed-use development called The Yacht Club, 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, apartment units at The Yacht Club translate from around R45 000 to R54 000.

Moraitis, who is responsible for marketing the development, says the going rate of the development is not high for the area. “It sits in perfectly with what has been achieved in the area.”

Amdec Property Development’s joint MD Nicholas Stopforth says with surrounding apartment offerings fetching R85 000 per square metre around the V&A Waterfront, the Yacht Club represents a discount.

Stopforth adds: “In reality it represents a fantastic investment opportunity for investors…. With the price that we are selling we think it is a good investment value and (offers) good opportunities for young professionals to live and work in the CBD.”

Located near Breakwater Boulevard, the 27 000 square metre-development is centrally located near the proposed luxury cruise-liner terminal and the multimillion-rand conversion of the old grain silos into the Zeitz Museum of Contemporary Art Africa. While having penthouses is a norm with high-rise apartment developments, this option is not available at The Yacht Club.

Amdec CEO James Wilson says if penthouses were available they would typically fetch about R20 million and they didn’t want to target that market, “as there is a far greater demand for properties in the R5 million maximum price range.”

The development, which will be completed in mid-2017, is expected to amass net yields of 9% to 14% for the first year – indicative of the strong investment case of sectional title projects in the area.

Another player gung-ho in the area is property heavyweight Growthpoint Properties, which co-owns the V&A Waterfront with the Public Investment Corporation. After launching two residential developments, Portsedge and Breakwater, the company is adding more upmarket apartment stock.

About 77 apartments are planned at Silo 3, which will be launched later this year for sale. CEO Norbert Sasse noted last month that the apartments would be priced from R2.5 million to R10 million. Penthouses would fetch more than R10 million.

The writer was a guest of Amdec at the launch of the Yacht Club development in Cape Town on Wednesday.

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