Construction World March 2020

PROPERTY

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APARTMENTS IN MIXED-USE PRECINCTS TRUMP FREEHOLD APARTMENTS While South Africa's residential property market has been a relative buyers’ market for the past few years, first-time-buyers remain cautious in placing their feet on the property ladder. S imilarly, local and international investors have become circumspect about expanding their property portfolios by way of South African investments. largely from the markets’ increasing need for convenience, safety and security, and a greater sense of community.

"Given the economic challenges facing the majority of South Africans presently, it's more important than ever to seek out properties that offer long-term capital growth, as opposed to simply a home or roof over one’s head,” says Stopforth. “Buyers simply can’t afford to incur additional costs linked to security, maintenance, repairs and renovations, just because the asking price of a property seems right at the time.” Demand for low-maintenance sectional title properties has remained relatively high, in comparison with larger freehold suburban properties with costlier overheads, which are sitting on the market for increasingly long periods of time. “Your home is an asset, so it’s important to invest in a home with good appreciation prospects. Local and overseas buyers are wisely gravitating towards mixed-use precincts as affordable options that are well positioned to increase in value,” continues Stopforth. )RU LQYHVWRUV VHHNLQJ GLYHUVLͤFDWLRQ LQ RUGHU WR EDODQFH WKHLU portfolios, investing in mixed-use precincts also guards against the risk of large-scale vacancies, when compared with single-use properties. With an assortment of tenants vying for multiple forms of occupancy, owners can boost rentals accordingly to strengthen both net income and net operating income. “The sale of luxury apartments at the Amdec Group’s One on Whiteley development in Melrose Arch, Johannesburg, and Harbour Arch in Cape Town speaks to the global demand for combined residential, commercial, retail and leisure living spaces,” adds Stopforth. “It's an asset class that has grown exponentially across the globe and South Africa is no exception.” ƒ

Analysts project another bleak year of economic growth in South Africa, on the back of a reduced 2019 growth forecast low of 0,3%. With the Reserve Bank forecasting that the economy will grow by a mere 1,4% in 2020, local buyers will need to be especially discerning with their investments in order to realise long-term value and returns. International investors, however, will have increasing room WR PDQRHXYUH ZLWK H[FKDQJH UDWHV IDYRXULQJ ͤQDQFH VWUHDPV IURP Asia, Europe and the US. 2019 trends showed that buyers have been gravitating towards smaller, centrally located, more affordable homes within close proximity to amenities and services. Location, lifestyle, low- maintenance, lock-up-and-go convenience, reliable security, and the SUHVHQFH RI UHFUHDWLRQ DQG ͤWQHVV IDFLOLWLHV DUH LQFUHDVLQJO\ WDNLQJ precedence over size and suburban curb appeal. This trend speaks QRW RQO\ WR LQYHVWRUV EX\LQJ WR UHQW EXW DOVR WR ͤUVW WLPH EX\HUV Statistics show a steady increase over the past three years – IURP WR ̰ LQ WKH QXPEHU RI KRPH ORDQV JUDQWHG WR ͤUVW WLPH buyers. There has also been an increase in the number of 100% bonds being granted, with some lenders extending home loans to include legal fees, transfer and bond registration. Nic Stopforth, Managing Director of Amdec Property Developments, believes that more price-conscious buyers are taking advantage of the favourable lending conditions and electing to invest in premium mixed-use precincts within thriving metropoles because they offer greater returns in terms of rental potential and capital growth. The rise in popularity of mixed-use precincts stems

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CONSTRUCTION WORLD MARCH 2020