Direct ownership in The Upper East Side mixed-use precinct on Brickfield Road in Salt River, is now on offer to property investors via Cape-based property investment specialists Flyt Property Investment.
Through a partnership with Spear REIT Limited, Flyt will make 183 studio and one-bedroom sectional title units available through their tax-effective Section 12J Flyt Select Fund.
The Salt River and Woodstock nodes have been rebirthed as one of Cape Town’s most vibrant, in-vogue neighbourhoods. Just ten minutes from Cape Town’s CBD, the suburb is strewn with cafes brewing artisan coffee, cool craft breweries, hip eateries, and super-trendy boutiques, art galleries and interior design studios. One of the first turn-around projects in Salt River, The Upper East Side is a trailblazer of this revitalised suburb.
The hotel, which has been managed under a leading international brand since 2012, forms part of a mixed-use development that includes residential apartments, trendy office space with co-working options, a retail section, restaurants, and bars.
Rental pool
The Flyt team have negotiated an attractive opportunity for their investors: not only will the investment into The Upper East Side via the Flyt Select Fund facilitate an income tax rebate of as much as 45% via SARS’s tax incentive known as Section 12J, but investors will also enjoy a five-year guaranteed return of 7.5% (after all property-related expenses).
The first three years is underpinned by a head lease with Spear REIT Limited, with years 4-5 being guaranteed by Anuva Investments. The units will be structured into a rental pool and will continue to be fully managed by Multi Rooms Management. Owners will also benefit from seven days own use of their unit at up to 30% discount on accommodation rates throughout the year.
Offering a substantial tax break, the Flyt Select Fund, managed by Section 12J leaders Anuva Investments, has proved popular with investors due to its finance facility. Speaking to investors during an online launch, Fund Manager Ryan Flowers explains: “Investors are able to select specific units in the development and receive up to 95% funding. The tax-efficient structure allows investors to use their SARS tax refund towards the purchase of their investment, and then assists in financing the balance – essentially, investors get up to 45% back.”
Spear REIT Group CEO Quintin Rossi says that the transaction gives investors a unique opportunity to enter the hospitality sector by investing on a secured income return basis.
The Section 12J tax incentive expires on the 30th of June 2021, so investors have until then to invest via the structure and claim their tax certificates. Units are fully furnished and serviced; prices range from R734 000 for a studio hotel room up to R3.5 million for the largest loft apartment suites.
