Residential property developers operating in the Greater Cape Town area right now are missing out on one of the biggest opportunities that the entire Cape property market can offer them, says Terry Begemann, manager of the Rawson Property Group’s Tyger Waterfront franchise’s rental division.
“For some 18 months now,” says Begemann, “we have had over 50 people on our waiting list for rental properties. They all want to live here more than anywhere else but it can take months to find them apartments and by that time many will have gone elsewhere. Surely this situation means that there is now room for two or three new apartment projects in this vicinity?”
There are, said Begemann, no less than 1,000 apartments in the Tyger Waterfront, but at no one time are there more than 1 to 3% available for lease – and one of the main reasons for this, she added, is that those who have secured an apartment lease will almost invariably renew it when it expires, even if the landlord increases the rent by as much as 10%.
“They know only too well that there is now a serious shortage of rental space in the Northern Suburbs, particularly this year, and certainly nothing else is as attractive as the Tyger Waterfront,” said Begemann.
In such high demand situations of this kind, added Begemann, rental increases tend to be high, but, although rises have been significant at Tyger Waterfront, they are still reasonable when compared to those of the more popular upper middle bracket central Cape Peninsula suburbs such as Rondebosch, Claremont and Kenilworth.
On average single bedroom apartments at Tyger Waterfront are renting for R5,800 a month, double bedroom units at R6,300 to R8,800 per month and three bedroom apartments at R10,000 to R12,000.
As a direct result of these units being so sought after, said Begemann, tenants are looking after their units far better – and all except a very small minority pay their rents on time. Begemann and her team manage some 200 units and over the last three years they have had to evict only one tenant for non-payment. Investing in such units, even despite the increased prices, said Begemann, therefore makes very good sense indeed.
Asked what formula she would advise a new apartment developer in this area to adopt, Begemann said that experience had shown that the complexes with retail space on the ground floor, offices on the second and third floors and apartments above them are almost ‘foolproof” in this precinct where all of the residents are, in fact, apartment dwellers.