Investing in security developments in upmarket areas where land is scarce is proving to be a winning formula for savvy property investors in the Cape’s most sought after areas.

John Wilkinson, developer’s representative for the Lake Michelle development in Noordhoek says that people who bought at Lake Michelle 9 months ago have already realised an annualised return of 40%, outstripping the 32.1% price appreciation of nationwide property in 2004.

“Security estates have always been popular but in the last few months there has been a surge in sales in the few new security developments in the prime suburbs of Cape Town.”

Wilkinson cites Constantia and Noordhoek in particular as areas in which investors are making spectacular returns and where buyer interest is high.

Wilkinson - who has spent more than four decades as a property developer - says that despite the strong rise in prices of the plots in Lake Michelle, there is still another ‘kicker’ in the prices when the first houses start to go up.

“What most people don’t realise is that once building starts and people can actually see what the finished product will look like, there is typically another surge in values of developments – historically this has been in the 20 to 30% range.  And given the current buoyant market conditions this could be even higher in 2005.

The Lake Michelle development has a prescribed architectural style based on the Seaside development in Florida which has been internationally lauded as an architectural beacon of design and functionality.

“These exclusive areas are always in demand because of the scarcity of land and quality of life. Any chance to purchase property in these kinds of sought after neighbourhoods in security complex is a good investment. We’ve seen fantastic demand for Lake Michelle and have had barely any plots come back on the market for resale.”

Lake Michelle, a R200m, ecologically sound development on the waters edge in Noordhoek, will undoubtedly be the last development in such close proximity to the Noordhoek wetlands because of the scarcity of land. It also borders on the Table Mountain National Park.

Already nearly 80% of the plots have been sold. The remaining plots range in price between R800k and R1.42m.