Rocketing building costs and a sharp appetite for commercial property recently scotched three major apartment developments in Sandton.
But other projects have survived and developers say the difference lies in specialised residential know-how.
Though Sandown Isle, The Sandown and The Axis on Grayston have all been canned, at least two apartment developments are steaming ahead: Newcity Group's The Emperor on West Road South and the Legacy Group's Michelangelo Towers.
Newcity Group MD Chaim Cohen says The Emperor will succeed because he is an experienced residential developer: "I saw the building cost crunch coming two years ago and allowed for a 20% escalation in costs."
He says accurate briefing makes for correct pricing, too. "I saved about R1m on the civils just by briefing the professionals correctly," he says. "I know what I'm doing."
Another developer that seems to have called the market accurately is the Legacy Group, which is making good progress with building 192 units at the R750m Michelangelo Towers at Nelson Mandela Square. The apartments are due for occupation in August this year.
"By commissioning the Towers earlier than other projects, we benefited from entering the market at a favourable point," says Legacy PRO Samuel Mundawarara. "It's a good time to be a contractor."
Cohen says selling prices at The Emperor are about R18 000/m² but he won't venture an average building cost per square metre.
Of 101 flats at The Emperor, 89 have been sold. Ranging in size from 150 m² to 380 m², they sold for R2m-R7,8m. Occupation is scheduled for late 2006.
Financial Mail
Publisher: Financial Mail
Source: Inet Bridge
