SA’ s super-stars in real estate
From one end of the country to the other, 2015 ended on a number of property highs. The buzzwords were ‘super-brands’ or ‘super-estates’, with developers increasingly refining mixed-use self-contained estates to meet investors’ revised definitions of luxury.
Every few years, to much fanfare, Umhlanga – one of the biggest growth nodes in the country – alters its skyline in dramatic fashion, and 2015 was that year. A R3,1-billion collaboration between Vivian Reddy of Edison Power Company and Rob Alexander of Ducatus Property Group, Oceans Umhlanga is to date the single largest private-sector development in KwaZulu-Natal.
The mixed-used development covers 90 000m2 of prime Umhlanga Village land, spans 250 metres from end to end, and has two residential towers of 460 apartments, and a retail tower named Ocean Mall for which Reddy has confirmed ‘big-hitter’ super-brands such as Burberry, Versace, Armani, Boss Orange and Paul Smith.
The key phrases from Reddy to the four architectural practices on board – Elphick Proome, Lyt, Ruben Reddy and Ravi Jhupsee Architects – were ‘Dubai’, ‘world class’ and ‘best ever’. The apartments have entry-level price tags of around R1,6 million, soaring 28 storeys up to R60 million for a double penthouse.
Marketing and sales fall under the auspices of DevMark Global, headed up by managing director Piaras Alvarez. DevMark Global’s local high-profile success stories include the record sell-out of The Pearls and Zimbali Suites.
The concept of ‘luxury’ today is a lifestyle where priorities are time spent with family, proximity to work, retail and leisure facilities, living closer to and more in touch with the land and nature, and healthy outdoor pursuits on tap.
Alvarez has around 25 years of global property experience, particularly in Dubai, the Middle East and Asia, and brings an entirely different operating model to his projects. ‘We learned how to market and sell in a way that’s more cost effective than has typically been done in South Africa. We cover a far wider gamut of functions than an estate agent, and we share our mandates with all other estate agencies.’
For Oceans Umhlanga, DevMark will hold their sales event for committed buyers on 26 March. Alvarez likens prices to not far off those in Cape Town: ‘Starting prices will be around R40 000 per square metre – a 40m2 studio with 10m2 terrace – up to R55 000 at the top end.’
In the Western Cape’s Paarl Valley, Val de Vie’s collaboration with the Mantis Collection to acquire Pearl Valley Golf & Country Estate is, says marketing director Ryk Neethling, the culmination of six years of endeavour. ‘We had this dream, and when we first spoke about it, it was so far off, so impossible. It’s been a very long process – a good lesson in perseverance – and it’s very satisfying to have been able to secure it.’
Neethling believes Val de Vie were the natural buyers: ‘We have a great relationship with the Drakenstein municipality, and a major plus is that we have the extra bulk capacity on water, sewage and electricity. We easily had capacity to develop Pearl Valley’s phase two, and once we had the undeveloped land, we thought, let’s combine it, include the golf, and offer these unbelievable amenities and facilities not found elsewhere. The Jack Niklaus golf course – one of the best in South Africa – is profitable, so no additional financial drain on anybody.’
For Val de Vie, the inclusion of Pearl Valley in the brand adds yet another lifestyle product to their list of 14. ‘We see incredible value here,’ says Neethling. ‘It’ll be a niche product with its own identity, but within the Val de Vie stable – it’ll be Pearl Valley at Val de Vie.’
Currently, Val de Vie and Pearl Valley are a 35-minute drive from Cape Town and the international airport, but with Val de Vie’s plans to construct a bridge spanning the Berg River to connect with the R45 – completion date 2017 – Stellenbosch will be only a 15-minute ride away. Neethling sees this narrowing of the distance as a great opportunity for the estate: ‘The prices in Stellenbosch are still about 30 per cent higher than at Val de Vie,’ he says, ‘[but] our prices have shown incredible growth on land of about 50 per cent over the last 18 months. In 2013, we were selling land at about R1 200 a square metre. We recently sold a piece of land, not even north facing, for R3 200 [per square metre]. In some cases, the value has tripled.’
With infrastructure as the catalyst for development, in Umhlanga the first residential block is being launched in one of the four nodes within the R50-billion Ridgeside precinct, the last piece of land available in Umhlanga. Landscaped parks, tree-lined boulevards, piazzas and a network of cycling and walking trails will weave among the natural vegetation.
Planning of Ridgeside is closely aligned to an environmental management programme, which includes a buffer zone to protect the remaining coastal forest. The southern and western aspects already include a number of corporate offices, including the FNB and other high-end office blocks.
Ten minutes farther north – and five minutes from King Shaka International airport – developer Charles Thompson’s Ocean Dune is the first residential development off the drawing board in the Tongaat Hulett mixed-use Sibaya precinct, which will ultimately comprise five development nodes across 750 hectares. Weeks before the official launch, Keller Williams Realty described in excess of 1 200 interested parties viewing the site, and over 3 000 registrations from interested buyers. Thompson’s portfolio includes Zimbali Suites, Ocean Club Zimbali and The Square Boutique Hotel.
Pretoria has Menlyn Maine, a R32-billion, 32-hectare mixed-used development with apartments, medical facilities, entertainment and parklands. All buildings are set to achieve a Four Star Green Rating through the Green Building Council South Africa (GBCSA). In addition, Menlyn Maine is one of only 16 cities participating in the Clinton Foundation’s Climate Positive Development Programme, which works together with governments and businesses across the globe to improve urban energy efficiency.
All residents will be able to access Pretoria’s new bus rapid transit (BRT) system, the Gautrain bus system and a new taxi station. A new bridge link is reportedly due to be built, which will feed off Atterbury Road to provide direct access to Menlyn Maine from the north which, with the completion of various other road changes, should alleviate potential traffic issues.
On a 2 200-hectare tract of land between Woodmead, Kyalami and Midrand is the Waterfall development, also destined to become a new green city. This estate has shown unprecented return on investment, and Geoffrey Crow of Century Property Development believes values will be driven up further when the retail nodes are completed, such as the Mall of Africa, being built at R40 000 per square metre and due to open in April 2016.
Crow says that over the past four years some values have doubled, even tripled, in value, and that they envisage an increase of as much as 50 per cent once they sell out the final properties, where demand will exceed availability. ‘Waterfall Equestrian Estate stands are up from R3 million land price to over R14 million on a recent sale,’ he says. ‘At Waterfall Valley and Waterfall Hills Mature Lifestyle Estate house prices have risen from an initial R2,2 million to over R4,5 million resales in three years. Waterfall Country Estate and Village have seen unprecedented returns, with stand values more than tripling from R650 000 to R2 million in resales four years later.’
And when it comes to rentals, the demand is huge, with clients achieving monthly rentals of between R27 000 and R150 000 on the Equestrian Estate.
Hong-Kong company Shanghai Zendai is behind the vR84-billion ‘smart city’ in Modderfontein, eastern Johannesburg. Development of the 1 600-hectare property began early in 2015. It’s envisaged as a 15- to 20-year project which includes, says chief operating officer Du Wenhui, 30 000 to 50 000 housing units of different types and sizes, an education centre, a medical centre and a sports stadium, and the 275-hectare Modderfontein Reserve. This private park, the second largest in Gauteng, includes portions of the Modderfontein Spruit, several dams, grassland and hills.
The Modderfontein site is strategically located between the Sandton CBD and OR Tambo International Airport; the Gautrain connects Modderfontein to the Johannesburg CBD, Sandton, Pretoria and the airport, while development plans for the site include a Gautrain station in Modderfontein.
Zendai Development SA is focused on growing a portfolio in Modderfontein. The landholding includes a number of commercial and industrial buildings to let, and Zendai intends to develop a Heritage Village which will include various cultural and recreational offerings around protected and restored buildings.
The land will be released in three ways: independent development, joint ventures or land sales. The first development phase will take place in the LongLake and Founders Hill areas – the first phase of LongLake will cater for office, commercial, residential and light-industrial developments, while the Founders Hill precinct will cater for the development of educational and training facilities.
Super-estates are changing the way we live and work.
Plans are under way to allow for the release and development of these areas, and Zendai Development SA are currently seeking strategic partnerships, investors and joint-venture partners. It’s estimated that on completion the development will create 200 000 jobs, cater for 100 000 residents and allow for the development of about 13 million square metres.
The 2 000 acres of land that comprise the lifestyle resort of Steyn City in the Fourways area has seen an investment of nearly US$82 million. At conception, it was considered the largest development of its kind ever undertaken in Africa, destined to consist of some 10 000 homes, which have been selling rapidly since phase one went to market in March 2015. Most of the residential properties in that phase have been sold, with investors coming from as far afield as Nigeria, Ghana, Switzerland, Sweden and Denmark. The accent on community living has been a drawcard for multinational corporates seeking new homes for their expat employees.
Mark Williams, a realtor at Steyn City Properties, reveals that the highest price mid-year for a rental property was for one valued at R120 million and rented out for R130 000 per month; another has been leased at R120 000 per month.
Comments Dr Andrew Golding, CEO of the Pam Golding Property group, ‘With R800-million worth of sales, or the equivalent of 150 units, clearly demonstrating a huge vote of confidence in this type of product, Steyn City has, in this short time, outperformed other luxury estates brought to market over the past decade.’ Investors are paying R3,5 million for a 1 000m2 stand, and homes are priced from an entry-level R4,2 million up to R19 million built and ready for occupation. Golding anticipates that those building now will more than triple the record price for the area in years to come.
And in the Western Cape, mixed-use development and redevelopment in and around the V&A Waterfront is going full steam ahead. Development managers Amdec Property Development has committed R1,2 billion to its mixed-use The Yacht Club, due for completion in mid- 2017.
Located within the Roggebaai Canal Tourism Precinct, connecting Cape Town’s financial hub, the Cape Town International Conference Centre (CTICC) and the V&A Waterfront, The Yacht Club will be the biggest development of its kind in the precinct, joining the existing Harbour Bridge Hotel & Suites and Canal Quays apartments. The location and transport systems make The Yacht Club superbly accessible by car, bus, shuttle, taxi and water-taxi.
The Yacht Club will feature one-bedroom, two-bedroom and luxury corner apartments ranging from 54m2 to 95m2, with a starting price of R2,4 million. Nicholas Stopforth, joint managing director of Amdec Property Development, confirmed the development has the potential to include a hotel and associated serviced apartments.
The V&A’s final phase of the Silo district is on track for early 2017 sign-off, at an investment of R1,5 billion. Together with No 1 and No 2 Silo developments, this will bring the total investment by V&A Waterfront shareholders, Growthpoint and the Government Employee Pension Fund, managed by the Public Investment Corporation (PIC), to over R2,5 billion.
The four new Silo developments (3, 4, 5 and 6) will introduce over 35 000m2 of mixed-use sustainable developments, including new corporate offices, a residential development, a Virgin Active Classic Health Club and a 220-key 8 000m2 mid-range internationally branded hotel, plus over 1 050 additional parking bays. Due for completion in late 2016, No 3 Silo will offer about 75 luxury one- to four-bedroom apartments.
Investment in South African infrastructure has played a decisive role in altering our property landscape. It’s been the catalyst for unprecedented mixed-use super-estate developments offering a range of elements, from security and traffic to easy access to nature. These super-estates are responding to the new lifestyle we want, as much as changing the way we live.