Increasingly recognised globally as an emerging tech hub, Cape Town is attracting not only an influx of tech start-ups but also significant, rising interest from international call centres, particularly from the UK and USA.
What are the key motivating factors?
Cape Town’s central city is ideally positioned to capitalise on its rising stature due to its efficient and innovative tech infrastructure, not to mention its highly appealing environment and lifestyle, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“Notably, in a recent report by Savills regarding Top Tech Cities around the globe, Cape Town is highlighted as an emerging centre in the FinTech space, along with Nairobi and Lagos, as the African market leapfrogs traditional banking. The report defines the broad area of FinTech as ranging from payment technologies and insurance tech to blockchain and cryptocurrency. New York and London, the two global leaders in financial services, top the Savills FinTech list, while the finance hubs of Singapore, Tokyo and Chicago also score highly. Others, like Miami, are bolstering their positions as financial centres by embracing finance technology,’’ says Dr Golding.
“Having transformed over the past couple of decades into a vibrant, mixed-use destination of choice for businesses, investors, residents and visitors alike, Cape Town’s central city offers connectivity not only in terms of technology, but also in the sense of providing access to a great lifestyle from a health, work, leisure and entertainment perspective.”
Basil Moraitis, Western Cape regional head for Pam Golding Properties concurs: “Ease of access to a trendy cosmopolitan lifestyle within a buzzing, pedestrian environment, as well as affordability of apartments to acquire in the sub-R3 million price band has made this a very sought-after node for investment for Airbnb’s. As a result, we are seeing a great deal of activity in the residential market, particularly in the West precinct from De Waterkant to Bree Street – the latter being the go-to area for the latest and trendiest restaurants.
What are the demographic and demand dynamics?
“In the central city, the demand is predominantly between the R1.5 million and R2.5 million mark, with buyers seeking anything from studios to two-bedroom apartments. Generally speaking, this price band will fetch a studio to one-bedroom unit in a desirable, new high-security block. Apartment blocks which will allow short-term lets are the most sought-after as this underwrites the capital value of the property - because it offers the investor opportunities to maximise the rental yield in the high-demand months.”
“Interestingly, this is driving a change in buyer demographics in the city, with both local and some international buyers making Airbnb letting an important consideration. At the high-end of the market, purchases are being concluded primarily for primary residence – a case in point being our recent sale of the luxurious four-bedrooms, four-bathrooms penthouse in Mutual Heights in Darling Street for R8.7 million which was sold to a buyer from Johannesburg.”
Spread over four floors, this quadruple volume, 374sqm opulent penthouse apartment is a unique piece of architecture, with sweeping views of Table Mountain and the central city, and secure key-controlled elevator access directly into the apartment. Once the tallest building in Africa, this building is a magnificent example of Art Deco decadence.
“Positively, word is that the old Post Office and the Standard Bank building in Adderley Street are to be redeveloped into an uber-luxurious 5-Star hotel, which will bring additional life and confidence to the central city,” adds Moraitis.
Apart from Cape Town, Stellenbosch in the heart of the Cape Winelands also enjoys a growing reputation as a prime tech hub.
“The formation in the late 80s of Technopark - a vibrant technology-focused park - has proven a magnet for innovative, like-minded individuals. This, together with the University of Stellenbosch – one of the leading universities in South Africa, has drawn enormous attention to the area, and has helped shape a solid foundation for the growing demand for real estate in and around the Stellenbosch area,” says Louise Varga, area manager for Pam Golding Properties in Stellenbosch, Somerset West, Gordon’s Bay and Strand .
“Both the Technopark and the university have generated a significant demand for properties catering for a broad variety of requirements, ranging from world-class wine farms and lifestyle estates to family homes and student apartments. With regards to residential property, family homes in Stellenhbosch generally sell between R4.5 million and R8 million in areas such as Brandwacht, Paradyskloof and Die Boord.”
“We find that tech-savvy buyers tend to lean towards a simplified way of life where innovation and technology are evident in both design and lifestyle, where the preferred price bracket is mainly in the price range between R2 million and R4.5 million,” adds Varga.
“There is a huge demand for accommodation for the middle-income workforce at both the university and Technopark. A good example of the type of properties currently high in demand in and around the town is a new development, Newinbosch, set on 48ha just outside Stellenbosch, where 1 320 apartments, simplexes, townhouses, courtyard homes and homesteads will accommodate some 5000 to 6000 residents, including young professionals, large families, students and retirees and people from all walks of life. Prices of units range from R1.795 million to R 4.513 million VAT inclusive. Currently the Townhouse, Courtyard and Homestead homes are on offer, while waiting lists are being compiled for the apartments and simplexes.
“Recently we sold a large homestead property to a family from the UK which is emigrating to South Africa, who will be making Newinbosch their new home. In general, Stellenbosch has a chronic need for housing as the growth of the town is limited by natural features such as our beautiful mountains and historic, iconic wine farms.”
Newinbosch offers numerous amenities and facilities including a shopping centre, primary and high school and creche, church, clubhouse, shared office space, gym, tennis courts, climbing wall, skateboard park, dog park, amphitheatre, 6000sqm urban farm, 25m training, water polo and underwater hockey swimming pool, children’s pool, boules courts, cycling and running routes and cricket nets.
“The bulk of our buyers in Stellenbosch are mostly locals purchasing for primary residence, however, a large number of investors acquire residential property to rent out to students. Other buyers are from all over the country, including Gauteng, KwaZulu-Natal and a few other provinces,” concludes Varga.
Writer: Pam Golding Properties
