Property Reporter

CAPE Town has been named one of the "higher growth cities of tomorrow" and international investors should place it on their radar screens, a report by multinational Jones Lang LaSalle and LaSalle Investment Management says.

International real estate information portal ResearchWorldwide.com issued the report, which says Cape Town is one of many cities worldwide with untapped potential and attractive performance prospects.

ResearchWorldwide.com says Jones Lang LaSalle and Lasalle Investment Management identified these "cities of the future" as being worth "placing on investors' and tenants' radar screens".

The management firm named 24 cities internationally as exemplifying those benefiting from one or more key drivers of success. It believes these cities may be "uncovered" as the rising urban stars of the next decade.

The will face higher future demand by virtue of either having a faster economy , being technologically advanced, or being "great places to live and work". These attributes "resonate with the developing images of our rising urban stars", the report says.

Under the theme of environment, Cape Town was defined as "resort, urban hip"

and "urban sustainable" .

Other cities in this category are Brisbane , Porto Alegre, Calgary, Copenhagen and Barcelona .

The report says Cape Town has seen strong growth in tourism, and is developing as a "conference destination".

"The city also has expanding media, film and information technology sectors, and will compete with and complement cities in India and the Philippines as a low-cost location for activity, with the added attraction of being in a favourable time zone," the report says.

Recent real estate investment activity in Cape Town's central business district provides evidence that the "rejuvenation of the central area is beginning to bear fruit", the report says. Real estate costs in Cape Town are low, the residential market is strong, and there are "growing opportunities for contact centres".

The report says the quality of the urban environment will become a more important determinant of city competitiveness in the future, particularly in "mature" cities .

"We have seen how the leisure factor has contributed to the success of cities such as Las Vegas and Dubai, and several cities with expanding leisure activities, underpinned by strong city governance and branding.

These cities will feature among the future rising urban stars," the report says.

Johannesburg-based property economist Francois Viruly says the Cape Town property market is "doing well" and that, more than any other city in SA, it is "certainly creating the effective balance between home, work and play".

Viruly says apartments being planned in the central business district are being marketed as being closely linked to "good shopping and entertainment".

This creates the "resort, urban hip" environment .

Cape Town-based property economist Erwin Rode says that as long as the political environment in SA remains stable, there is no reason for Cape Town to stop being a "hip" place to live.

Rode says Cape Town has always been "pretty", but no one knows what triggered its recent change in image into an international bestseller.

"It takes a long time to become hip, and in the absence of political instability, it will equally take a long time, if at all, to reverse this trend.

"It looks like Cape Town's image is assured for a long time to come," Rode says.

Rode says that being named as resort city will affect small segments of the property market , "the very top end of the market", positively.

He believes foreign interest in Cape Town real estate has not yet had a large role in the burgeoning property market.

Rode says that from 1984, the Cape Town house market performed better than the rest of SA, the most probable reason being that it did not suffer, as did the rest of the country, from the crash in the gold price.

"It's more a lack of negatives than the presence of positives. The better performance we saw in Cape Town from 1984 onwards was because the local economy was performing better than the rest of the country," he says.

Rode says the property boom in Cape Town has nothing to do with the advent of democracy in SA.

"That's not to say the new SA didn't give it a boost, but I think it's overrated," he says.

Feb 12 2004 07:53:19:000AM Nick Wilson Business Day 1st Edition