Areas and Places

Cape Town’s Observatory experiences solid returns

Rawson Developers The Paragon
Carl Nortje on site at The Paragon, Observatory, with (from left) Edward Makoni, Ebrahim Casker and Duncan Johnson (right).

A leading Cape Town-based housing company is facilitating urban renewal in select suburbs to the South of the city CBD. The company accurately predicted growth in the property market and has facilitated this on behalf of buyers by way of developments in areas that include the Claremont CBD, Kenilworth, Newlands, Rondebosch and more recently, Observatory’s Main Road precinct.

Says an upbeat Carl Nortje, managing director of Rawson Developers: “Freehold properties come with a responsibility and a burden of expense. Today, many buyers are looking towards their own well being, physical security and financial success. For investors and homemakers this suggests they seek a win-win investment, paying back by way of capital growth and possible rental income over a short period of time”.

Payback has been swift as in the example of Rawson Developers’ signature property development, the Beaumont, close to Cavendish Square in the heart of Claremont. This became a runaway success that rapidly sold out to rave reviews and gave its initial investors a substantial 34% p.a. growth on capital on entry level units over the 3 year period it took from offer to purchase to handover.

In line with these challenges of today’s economy, Rawson Developers has pioneered the compact, secure and ‘lock up and go’ urban apartment lifestyle with great success. Targeting investors, student accommodation and young adult professionals, it’s most recent offering to the market, the 105-unit 8 floor Winchester on Main Road Observatory, was virtually sold out within 24 hours of its launch. The company’s head of marketing, Brad Morgan confirms: “We realised that Observatory Main Road was a relatively underdeveloped yet high potential suburb. One of three trend setting developments along Main Road Observatory, the Winchester sold 90% of its units within a day of its launch. Two other well-positioned developments, namely Madison Place and the Paragon are currently under construction in an excellent location across the road from the Groote Schuur Private and State hospitals – a real centre of excellence for professionals, investors and students who want quick access to the city – straight up Anzio Road and onto De Waal Drive ”.

A successful finance application, completion of the agreement of sale and a 10% deposit into an attorney’s trust account secures the sale. Morgan says that units typically are on offer to the market in the price range R 1.7 – R 4.7 million.

“Attractive features include indoor-outdoor integration on units with balcony space, rooftop spaces with pools, social areas, gyms and even private gardens. As regards the Winchester, access to the N2 via Settler’s Way could not be easier”, adds Morgan.

A very attractive incentive by SARS has helped to enhance the appeal of this suburb to the property investor. The Observatory suburb was declared an urban development zone (UDZ) by the City, so investors are allowed to amortise their initial capital investment with SARS over a fixed number of years, providing the property is used in the production of income such as rental. This results in a very favourable tax dispensation. “All in all, this makes Observatory a very attractive proposition for the home buyer or the investor. It is truly in line with the challenge thrown out by leading property experts that buyers need to embrace lateral thinking in a market where other investment returns are relatively low” adds Morgan.

Rawson Developers flagship Observatory buildings offer substantial attractions to the market. “As with all our recent developments, buildings such as the Winchester incorporate essential sustainability features that include centralised heat pumps, double glazing, LED lighting and VOC-free paint. This ultimately lowers operating costs for owners and brings the building up to speed with green building trends”, says Dale Nortje, head of project development at the company. Madison Place, the Paragon and the Winchester have a limited number of units still available to the market.