In prestigious, prime locations such as Bantry Bay, Clifton, Camps Bay, Fresnaye and the V&A Waterfront on the Western Cape’s Atlantic Seaboard and exclusive Southern Suburbs areas such as Bishopscourt, Constantia and Kenilworth, long-term residential rentals, (12 months and over) of R60 000, R70 000, R80 000 and upwards per month are fairly common, and increasingly so, says Dexter Leite, rentals manager for Pam Golding Properties in the Western Cape Metro Region.
“While the market remains active in all the rental segments that we trade in, we have seen an increase in demand for long term, luxury residential rentals at the upper levels. A recent case in point was a property in Bantry Bay leased at R104 000 per month – escalating to R114 000 in the second year of the 24-month lease, an apartment in Fresnaye let for R100 000 a month and two homes in Fresnaye and Bishopscourt respectively, each leased for R70 000 per month.
“We currently have properties listed at rentals of R120 000 per month in Bishopscourt, R100 000 in Kenilworth Upper, R80 000 per month in Constantia and R75 000 a month in Steenberg Golf Estate – all situated in Cape Town’s prime Southern Suburbs locations.
“The demand for rental property across all price bands in these locations generally far outstrips the supply, particularly in the lower to mid ranges. Rental enquiries have been brisk during 2014 – a trend which has strengthened during 2015 to date, with the number of leases tempered only by the availability of stock.”
So who are the tenants prepared to pay top dollar for luxurious properties and why would you outlay that amount each month on a rental property rather than make an outright acquisition?
Leite says some of these tenants or occupants are senior executives who have relocated either nationally or internationally to take up a position for a period of time, while others may ultimately migrate from renting to buying, after a length of time.
“At this executive level – apart from the all-important factor of location – entertainment, space and other necessary ‘executive-type’ facilities in the premises are also key requirements reflecting the relevant lifestyle. Well-appointed guest rooms or suites and a sophisticated home office forming part of the property may also be a pre-requisite for business purposes and visitors.
“It makes sense for someone at a senior executive level who relocates to Cape Town, to rent for a while as opposed to purchasing a property from the outset, if the appointment is of a permanent or semi-permanent nature. Flexibility, cost and ease of relocation are also real benefits in a rental versus purchasing scenario, depending on the circumstances.
“There are a number of reasons why rentals at this top-end level are achieved and in demand. Ultimately, demand and supply has a bearing and dictates cost and rentals achievable. One must also bear in mind that as property prices have increased during the last number of years, post the 2008 recession rentals have increased commensurately.
“Also,” says Leite, “depending on the individual or corporate needs, there is a certain status level at which high-placed executives, officials and captains of industry operate, and the residential accommodation generally requires and reflects this, particularly so as they entertain and receive business associates at their homes and may also require overnight facilities for VIP guests and other visitors. Tenants at this level are very discerning and require all or most of their boxes to be ticked when selecting top end or high value rental properties. While location remains paramount the decision is also driven by the tenant’s life stage, proximity to good schools, lifestyle offered and other required amenities. Security and privacy is always of importance, then some like sea views and others prefer mountain views – it all depends on personal preferences.
“Some of our top-end tenants come to us directly, concluding leases in their individual capacity for a variety of reasons. Not all these rentals are necessarily relocation driven. For example, they may be revamping their primary residence and need a temporary home, while others may have sold their homes and seek to rent for a period of time.”
With its world-class location and convenient access to the city of Cape Town and all major routes, the V&A Waterfront is another prime location for top-end luxury rental accommodation, sought after among local and upcountry tenants as well as those from abroad. Here rentals range from R28 000 for a two bedroom, unfurnished apartment up to R85 000 per month. Pam Golding Properties recently concluded a number of rentals for apartments ranging from R43 000 to R50 000 per month.
Says Leite: “There has also been a very strong demand for residential accommodation to let in Cape Town’s City Bowl area, across all rental categories, where top-end homes with four and five bedrooms have let from R35 000 to R48 000 per month, with smaller three bedroom homes fetching rentals from R18 000 to R28 000. In regard to apartments two bedroom units range from R8 500 to R16 000 per month, depending on location and finishes, while loft or one bedroom apartments yield monthly rentals from R6 000 to R8 500. A central location, minimal commuting distances and a live/work/play lifestyle adds to the area’s allure.”
He adds that student accommodation was also in high demand during the run up to the academic year in the Southern Suburbs and City Bowl areas, with monthly rentals starting from approximately R5 000 for a one bedroom apartment, reaching up to R20 000 for a four or five bedroom house – with students expecting to pay on average R5 000 per bedroom.