Business Day Reporter

STRONG demand for rental accommodation at Cape Town mixed-used precinct Century City has in recent months mopped up all supply, says Rob Downey, of Property World, the on-site agents for Century City.

Downey says there is now a serious shortage of stock.

The increased demand for rental accommodation has come on the back of higher interest rates, the introduction of the National Credit Act and growing demand from the corporate market.

“At one stage there were about 400 units available to let over all our developments and this has dwindled to almost nothing and we have a waiting list of would-be tenants,” says Downey.

He says of the 2500 units that have been developed at Century City in recent years, about 20% of these were buy-to-let investors who were achieving between 5% and 12% returns on rentals depending on when they had purchased their units.

Rentals are R3800, R4700 and R6300 for one-, two- and three-bedroom units respectively.

Furnished apartments and short-term lets to the corporate sector are achieving rentals from R6500 for a one-bed unit up to R11000 for a two-bedroom unit.

“The fact that demand is now outstripping supply will see a firming of rentals going forward and will obviously improve the return to investors.” The residential sales at Century City have held up comparatively well in the softer residential market.

The total value of sales for the first seven months of the financial year was R180m, almost on a par with the corresponding period last year.

Source: Business Day