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Atlantic Seaboard and City Bowl rental markets buffered by niche sectors
Category Property News
After almost a decade of double-digit growth and riding high as the strongest rental market, 2018 yielded the lowest growth figures for the Western Cape since 2012 according to Payprop data. However, certain areas have fared better than others, especially those where the market has been buoyed by the more resilient corporate and medium-term sectors.
Lisa Hendricks and Debra Levin, Partner Rental Specialists for Lew Geffen Sotheby's International Realty on the Atlantic Seaboard and City Bowl say that certain areas like these have been buffered to a certain extent because of their unique drawcards that continue to attract tenants in these niche markets.
"Like most areas, the long-term residential market in these two nodes has taken a considerable knock during the past 18 months with surplus stock and declining rental returns becoming the order of the day, however, we are still seeing strong demand for corporate lets and medium-term leases.
"The majority of our corporate clients are businessmen who commute between Johannesburg and Cape Town as well as a considerable number of foreign corporates from the UK, Germany, the US and other African countries who travel to the city regularly.
"There is also a significant number of overseas visitors who come here regularly and prefer to rent a beautiful apartment on a longer-term basis so that they have a home from home rather than different impersonal air bnb properties each time."
Brendan Miller, CEO of the Atlantic Seaboard and City Bowl office, explains the appeal and why demand in this niche market is expected to continue for the foreseeable future: "Essentially, these two areas offer an unsurpassed combination of convenience and a cosmopolitan lifestyle in one of the most scenic parts of the country.
"This is largely due to their convenient proximity to the CBD, Cape Town Convention Centre and V&A Waterfront as well as major routes to all the city's other key nodes and an array of world-class facilities, amenities and leisure activities.
"World class beaches are at most a short drive away, often merely and residents are spoilt for choice when it comes to restaurants, entertainment and retail options as well as outdoor and sporting activities."
He adds that the appeal of self-catering options in these areas is largely underpinned by the flexibility they offer as well as cost-effectiveness compared to the high cost and seasonal availability of hotel accommodation in the city.
"More and more investors are also beginning to realising the benefit of medium-term lets and of catering to travelling executives," says Miller.
So, what do these tenants look for in a property?
"International frequent travellers and corporate clients do have rather exacting standards," say, Levin and Hendricks, "and there are a number of non-negotiables."
"Most popular are modern apartments with 24-hour security and they expect high-quality finishes and furniture, a full complement of quality appliances and a strong, reliable Wi-Fi connection.
"Corporates renting with families and holiday-makers tend to opt for houses or townhouses with good security or in security estates."
The duo adds that the most active price band is rentals priced between R60 000 and R80 000 with local corporate tenants generally signing leases from six to 12 months whilst international corporates tend to prefer leases of up to two years.
Author: Lew Geffen Sotheby's International Realty