The R100m Colosseum luxury suites, now under construction on a prime site in Century City, have attracted the interest of an unexpectedly large number of South African investors.

With double-volume retail and restaurant space on the ground floor, three storeys of offices, topped off by two floors of plush hotel suites and penthouses, the Colosseum will become a microcosm of the new urbanist philosophy that has been implemented so successfully throughout Century City.

Brian Singer of the Singer Group, who is developing the luxury hotel, says that the response from local buyers has been ?phenomenal?.

Initially, the developers planned to launch the development in April in London and Dublin, but decided to stage a pre-launch in Johannesburg, Pretoria and Cape Town. The response was so positive that 42 suites were sold in the first two weeks.

"Most buyers have been drawn to the development because it is an ideal property investment for those wanting exposure to the Cape Town market - in a completely managed environment - with a guaranteed rental return for the first two years, and an escalating projected return thereafter," says Singer.

For clarity, there is a guaranteed rental with a minimum of 5% return each year on investment in the first two years.

There is also no transfer duty payable and no property levies will be charged for the first two years.

Investors who purchase a suite or penthouse are entitled to spend four weeks free holiday accommodation a year at the Colosseum or at one of 3600 RCI affiliated resorts in 94 countries.

"This makes buying a suite ideal for the out-of-town investor," says Singer, who goes on to say that South African investors clearly want to invest in the Cape Town property market, and also want to gain some exposure to the tourism industry, particularly in the run up to the 2010 Soccer World Cup.

The Singer Group, which owns several travel companies, hotels and restaurants, has appointed Protea Hotels to operate the suites.

Commenting on the number of sales to South African investors, Singer indicated that, based on their past experience with similar hotel developments, they had under-estimated the demands of the local market.

This misjudgement was most likely due to the response from the Singer Group's last development, the Island Club Hotel, that was sold predominantly to foreigners.

Needless to say, the developers have cancelled their planned trip to London and Dublin as they are confident that local investors will buy the remaining suites and penthouses.

There are 56 suites, leaving only 14 units available for purchase. They are priced from R995,000 to R1,565m including value added tax.

Perhaps the biggest draw card is that buyers will have free holidays in a luxurious Cape Town hotel every year.

Business Day
 
Publisher: I-Net Bridge
Source: I-Net Bridge