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| Cape Town CBD Leisure Market Positioned for Growth |
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The Cape Town CBD is set to experience phenomenal growth in its visitor economy sector, according to the findings presented recently at the Cape Town Partnership’s (CTP’s) 8th Annual General Meeting
Commenting on the CTP’s 2007 Annual report, Chief Executive of the CTP, Andrew Boraine, noted that of the 45 750 beds currently available to visitors in the greater Cape Town region, more than 21 500 (47%) were located in and around the CBD, with many more scheduled to be a significant part of the R30-billion worth of both private and public sector investment planned for the next five years in the central city.
Referring to its growing popularity particularly with international tourists, Boraine says “Cape Town has undoubtedly become the safest central city in South Africa. Hence we have already seen the rapid development of new hotels such as The Adderley, Protea North Wharf, Urban Chic, Daddy Longlegs, Cape Diamond, and Protea Extreme, to name but a few.”
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| Reporting of Rates Hikes Causes Déjà Vu Fears Amongst Johannesburg Property Owners |
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The property market recently experienced a sense of déjà vu as Johannesburg property owners waited to hear the final outcome of the city’s new municipal valuation role
The announcement came last week that residential property owners in Johannesburg would be paying half a cent in rates for every rand that their property is worth, and that, in line with rates charged for many years in Cape Town, rates would now be charged on both the value of their land as well as improvements. Johannesburg property owners previously paid rates based only on the value of the land at a total of 12,3c in rates for every rand of their land value.
Before the announcement last week, Johannesburg property owners awaited the new rates with trepidation, in the light of both the pre-2004 property boom which took place after the last evaluation, as well as reports in the press warning of ‘sharp increases’ for Johannesburg when the Property Rates Act comes into effect on 1 July 2008.
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| Lanseria Airport Gets Upgrade |
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Departure and arrival halls at Lanseria Airport outside Johannesburg are being upgraded to cater for increased passenger volumes and security requirements for scheduled operations, as the airport expands to help relieve the pressure at OR Tambo airport
Departure and arrival halls at Lanseria Airport outside Johannesburg are being upgraded to cater for increased passenger volumes and security requirements for scheduled operations, as the airport expands to help relieve the pressure at OR Tambo airport.
Transport minister Jeff Radebe giving a written reply to a parliamentary question from the Democratic Alliance's Stuart Farrow, said that because of the difference in scale of operations and capability to handle large aircraft, it is unlikely that Lanseria will significantly reduce the need for airport expansion at OR Tambo.
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| Cape Town Partnerships in Action |
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The City of Cape Town has doubled its financial contribution to the Cape Town Partnership over the next three years
This means the City will contribute R18 million over the next three years – an increase of more than 50%.
This year was also the first time that the City has entered into a three year financial contract with the Partnership – opposed to the normal one-year contract since inception in 1999.
Shaun Johnson, CEO of the Mandela Rhodes Foundation and Partnership Board Chairperson, said that this vote of confidence in the work of the Cape Town Partnership will ensure that the Partnership will be financially sound to deliver on its mandate and that projects planned for 2010 and beyond will be finished on time. Johnson expressed his sincere appreciation for the City’s contribution during the Partnership’sAnnual General Meeting held today.
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| Leverage Your Property Investments Correctly |
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Despite successive interest rate hikes, and the prospect of more to come, property remains an attractive investment option, particularly if it is leveraged correctly
According to Jane Downing, head of New Business at BoE Private Clients. She says that the dramatic increase in property prices, which has pushed up capital values of real estate investments over time, has created large surplus value in many property investments and that this can be leveraged to finance 100% of the purchase price of any new additional properties.
“Innovative finance for individual investors - either a single facility secured by a range of properties or a number of separate loans secured by one or two properties provides flexibility and ensures borrowings that are most tax effective.
“Over the longer term, residential and commercial property still offers relatively attractive returns. This is particularly true of commercial property, but even with residential property a real return on investment can be achieved, not least in view of increasing tourism and growing demand in the run up to the 2010 soccer World Cup,” says Downing.
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| Seeking Out The Property Bargains |
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With the new National Credit Act and rising interest rates having brought more balance to the Western Cape property market, some 'bargains' can be tracked down in the region
This is according to Chas Everitt International agency principals, who said this week there had been a return to realistic pricing and that good buying opportunities were arising, particularly in cases where higher interest rates had put property owners under pressure.
Dean Meijer of the Chas Everitt International office in Onrus says: “The current market is... favourable for buy-to-let investors who can service their bonds as more people are opting to rent.”
He also predicts a positive turnaround in the market from the middle of next year, “when interest rates will in all likelihood start declining”.
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| Summing Up The Economic Forecast |
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Attendance at the 2007 Annual Rode Conference held last month in Cape Town and Johannesburg broke all previous records
Attendance at the 2007 Annual Rode Conference held last month in Cape Town and Johannesburg “broke all previous records”, according to property economist and conference organizer, Erwin Rode of Rode & Associates.
“For the first time in the history of the conference, we had to turn delegates away,” comments Rode, who once again presented his annual Prognosis for Property.
The popularity of the conference is due in no small part to the calibre of speakers, among them at this year’s event being John Loos (property strategist at First National Bank’s Home Loans Division), Dr Cees Bruggemans (chief economist of First National Bank), Prof Andre Roux (director of the Institute of Futures Research at the University of Stellenbosch), Dries du Toit (of Dries du Toit Consult CC), attorney John Gilchrist (editor of My Mortgage magazine), and Chris Bosch (of Rural Maintenance [Pty] Ltd).
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| Negotiating The National Credit Act |
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Commenting further on the new legislation, Gilchrist was of the opinion that the Act would have no real, long-term effect on the property market
At the recent Rode Annual Conference held last month, John Gilchrist (editor of My Mortgage magazine) described the new National Credit Act as a vehicle with which to “save South Africans from themselves”.
Commenting further on the new legislation, Gilchrist was of the opinion that the Act would have no real, long-term effect on the property market but rather just a short-term period of adjustment and could even work to the advantage of those who had found themselves being turned away from banks in the past.
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| Property Exposure Climbing |
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Many of South Africa's pension funds are now starting to bulk up their exposure to property, as they can no longer ignore the spectacular comeback that commercial bricks and mortar has made over the past two to three years
In the 90s, most institutions and pension funds were getting shot of large chunks of their property portfolios. Property - both directly held and listed - was generally rated as the worst asset class to be in back then, as an oversupply of commercial space kept a firm lid on rental and capital growth.
Subsequently, institutional investment in property as a percentage of total assets dropped from an average of 10% in the early 90s to less than 4% a decade later.
But it seems times they are a-changin', to quote Bob Dylan.
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| Social Drivers Affect South African Property |
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Last week Prof Francois Viruly of Viruly Consulting gave his opinion on the impact of economic drivers on SA's property market, this week he explores how social drivers affect it
Last week Prof Francois Viruly of Viruly Consulting gave his opinion on the impact of economic drivers on SA's property market, this week he explores how social drivers affect it.
This brings to the fore the question of whether we are going to see more high or low-income areas in townships," he says.
Viruly says that many years ago he confidently divided people into those associated with commercial property and those associated with residential property. "Increasingly these markets are getting closer and closer. The Melrose Arches of this world are examples of where these components are integrating.
"The next issue we have to ask ourselves is how will we start with this in townships? Are we going to move into the next frontier which is going to see townships with swimming pools and more amenities? I believe that we will see a middle class in the township environment and I wouldn't be surprised if we move into that particular direction, i.e. a complex with a swimming pool."
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