Almost every prediction – even the most optimistic – regarding the likely success of Rawson Developers’ “The Rondebosch” sectional title complex in Belmont Road, Rondebosch, Cape Town (diagonally opposite the historic fountain) has either been met or exceeded, says Paul Henry, Managing Director of Rawson Developers.
This was recently confirmed by John Birkett, franchisee for the new Rawson Rentals Cape Metro Classic franchise. Birkett said that “The Rondebosch” is likely to go down in history as one of the most successful Cape property developments of all time.
“All 166 units in the six story building,” said Birkett, “were sold out by the end of December 2012 and handovers, which began on the 1st of November 2012, were virtually all complete by the 1st of January this year.”
“Following this highly successful sales effort, it rapidly became clear that rental demand would probably be stronger than in any other Rawson development to date. By mid-January all the units available for renting (approximately 90% of the total) had been taken up, and, estimated on a square metre basis, the prices here were higher than ever before achieved in this suburb.”
Birkett said that the single bedroom units rented by him and his agent Andrew Pike, had achieved monthly rentals from R6, 000 to R8, 000 while two bedroom units have been renting from R9, 500 to R12, 000. The only three bedroom unit available for renting achieved a figure of R12, 000. These rents, said Birkett, equated to an average return of around 8% on the purchase prices.
Despite the high prices, added Birkett, the vast majority of tenants have been drawn from the student populations of UCT and Varsity College. They are, he said, attracted by the mountain views available from many of the units, the close proximity to both tertiary institutions, the open-plan layouts and the upmarket finishes, for example, wood laminate floors, porcelain wall tiles and granite tops. Tenants and buyers also appreciate the sophisticated features (notably the built-in ovens and hobs), the ample secure parking available in the building and the 24/7 security. A concierge is on duty in the foyer around the clock.
Already, said Birkett, two investors have realised significant resale profits – anything between18 and 22%. For example: a single bedroom unit bought for R900, 000 was recently resold by Birkett at R1,100,000 - a profit of 22%.
In high demand rental areas such as Newlands, Claremont and Rondebosch, said Birkett, agents and investors alike often underestimate the value that can be unlocked in rental stock in the area.
Birkett, who has consistently maintained an above average market share of sales in the area he serves, has now set up a semi-independent rental agency. He is convinced he can offer a unique hands-on rental package to new investors and investors to whom he has sold to over the last few years who would like to run solid rental portfolios.
