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Developers fetching record prices for new luxury apartments in Cape Town and Johannesburg

Posted On Monday, 13 July 2015 19:08 Published by
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Developers are fetching record prices in a number of new luxury apartment buildings in sought-after areas of Cape Town and Johannesburg.

John Rabie

Sectional title values are testing new highs. Developers are fetching record prices in a number of new luxury apartment buildings in sought-after areas of Cape Town and Johannesburg. On the corner of Riebeeck and Long on Cape Town’s foreshore, seasoned developer John Rabie is transforming the old 23-storey Safmarine House into what will become the Swedish Rezidor group’s first apartment hotel in SA. The Louis Karol-designed skyscraper was Cape Town’s tallest building until Old Mutual completed its Portside last year.

The new five-star Radisson Blu Hotel and Residence will offer a mix of hotel rooms and privately owned apartments. The first 11 floors will comprise 215 hotel rooms while floors 12-21 will house 128 luxury one- and two-bedroom apartments. The top two floors of the building will boast 10 penthouses with price tags of between R10m and R35m. Ninety percent of the 128 apartments, priced from R1,63m to just under R5m, have already been sold scarcely five weeks after Rabie’s company, Signatura, in partnership with property owner Shaun Rai, officially launched the R1bn development. That translates into a rand per square metre rate of around R35000-R55000, which sets a new benchmark for Cape Town CBD apartment prices. It’s more than double the average R19227/m² sales price fetched for apartments changing hands in the city centre in 2014.

Buyers at the Radisson have the option to place their apartments in the hotel’s rental pool once it opens its doors next October. Rabie, also nonexecutive chairman of Rabie Properties, which was behind Cape Town’s multibillion-rand Century City and Westlake developments, ascribes the strong demand for the Radisson apartments to the building’s prime location. It’s within walking distance of the V&A Waterfront and a stone’s throw from the International Convention Centre and a number of corporate head offices such as Investec and FNB/WesBank.

Though prices achieved at the Radisson may well set a new record for the inner city, Rabie believes the Radisson still offers a value proposition, given that apartments at the nearby Marina at the V&A Waterfront typically trade for R70000/m² Johannesburg developers have seen an equally strong take-up of luxury apartments in recent months, particularly in the Sandton and Rosebank areas, where a number of new developments are under construction or being planned.  Last week Amdec and Pam Golding Properties (PGP) launched the fourth residential phase at trendy mixed-use precinct Melrose Arch, with 119 one- and two-bedroom apartments for sale from R2,965m to just over R6m — the equivalent of R45000R48000/m², nearly double the R24000/m² asking price for new Melrose Arch apartments during the height of the 2006/2007 boom, according to PGP’s Peet Strauss. In October last year, Chaim Cohen’s Newcity Group launched the 12-storey Embassy Towers behind the US embassy, a block away from Sandton City on Empire Place in Sandhurst. About 70% of the units have already been sold off-plan despite prices of two-bedroom units starting at R6,5m. Three of the building’s five penthouses on the top floor, all with expansive views across the city, have been snapped up at between R21,5m and R28m.

The latter is a 500m² unit, including a 150m² roof garden and pool. Prices achieved at Embassy Towers translate into an average R45000-R50000/m², which Cohen believes sets a new record for Sandton apartment values. “When I first presented my price list to my partner and estate agent about a year ago they both thought I was mad, as nothing else was selling at this level yet.” But Cohen says Embassy Towers has sold successfully because the surge of middleand upper-management employees into Sandton on the back of large-scale office developments, coupled to increased traffic congestion, has created demand for luxury apartment living in a mixed-use environment. “We are also delivering a product in a prime location that is unrivalled in the Johannesburg market.”

Cohen says when Newcity first launched The Emperor, its first high-rise development in Sandton, 10 years ago, many doubted they would achieve the then price-breaking level of around R13500/m². “When The Emperor was completed two years later, buyers were reselling at R27000/m², double the purchase price.”

Cohen believes upper-end sectional title prices in Sandton may soon rival those of Cape Town’s V&A Waterfront and Atlantic Seaboard suburbs, where upperend apartments sell from R60000/m² to R100000/m². In fact, apartments at Legacy hotel group and Nedbank’s recently launched The Leonardo, near the Johannesburg Stock Exchange, are already fetching up to R80000/m². The R2bn Leonardo development at 75 Maude Street, near the Hotel Balalaika, will be Sandton’s tallest building, at 42 storeys or 150m.

The development will comprise nine floors of offices, 200 apartments, including eight 500m² penthouses, and The Leonardo Suite, a 2100m² penthouse, which is expected to beworth a staggering R180m on completion.

Source: FM

Last modified on Monday, 13 July 2015 20:26
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