It points to an appetite for luxury and holiday homes across the country, especially in the Garden Route region. Set on a 90ha island in Knysna Lagoon, the Thesen Island project is transforming what used to be a wood-processing factory site into 19 islets linked by bridges.

One island will house a commercial development with retail and leisure facilities, while the others will be purely residential. Six of the residential islands are single home islands selling for about R2,2m each.

When the project came to market about three years ago there were fears that it would not make a good substitute for the factory, which maintained about 1000 job opportunities.

Rutherford, however, says Thesen Island has been a blessing in disguise, as it will pump about R100m a year into the local economy and create up 2000 jobs.

A thorough environmental assessment will benefit the lagoon, which had been affected by factory operations.

When it was launched, Thesen Island took advantage of a boom in the residential property market. The boom continues despite a four percentage point rise in interest rates to 17% this year; buyers are generally superrich individuals whose income is barely affected by rising interest rates.

Many are foreigners who are taking advantage of the rand's weakness. Rutherford says sales are approaching the R180m mark. More than one third or 216 stands have been sold and some families have moved in. About 15 homes have been completed and 37 others are under construction.

Second phase stands which do not have water frontage are priced from R350000. Stands in a site called the plantation point overlooking the lagoon are priced between R1m and R2,4m.

Rutherford says a 40m arched bridge will replace the access to the island in December.

Business Day