Johannesburg Stock Exchange (JSE) listed property company, Growthpoint Properties Limited, reveals it will develop 266 residential apartments at the V&A Waterfront in Cape Town.
Apartments at the V&A Waterfront are affordable with with studio apartments that will rent from R5 500 a month to R25 000 a month for three bedroom units.
Development is underway for the apartments in the Portswood Ridge and Breakwater precincts and these are due to be released for letting to the market in the third quarter of 2014, explains chief executive officer Norbert Sasse, who says this was a deliberate strategy to bring more people to work, live and play at the V&A Waterfront.
Sasse notes that the perception has always been that the precinct is exclusive and targeted at foreign nationals visiting the country, however, that is changing and the foray into residential units is a move to attract more locals, in addition, Growthpoint is looking at adding more traditional South African retail stores.
Asked about rentals, he says they are not yet finalised, but they are affordable, so the precinct is open to locals as well with studio apartments that will rent from R5 500 a month to R25 000 a month for three bedroom units.
These rentals will not be short-term as they do not want to compete with hotels in the precinct, he points out.
Growthpoint is the largest listed REIT on the JSE with property assets valued at R63.1 billion including 100 percent of Growthpoint Properties Australia (GOZ) and 50 percent of the V&A Waterfront in Cape Town.
Its market capitalisation is R47.0 billion as of 31 December and it has a diversified portfolio which comprises 388 properties in South Africa, 49 in Australia that are 63.5 percent owned and a 50 percent interest in the properties of the V&A Waterfront.
Growthpoint reports distribution growth of 8 percent for the six-month interim period to 31 December 2013, outperforming original market guidance.
Sasse attributes the positive results to the solid performance from the South African property portfolio as well as growing distributions from GOZ as making a strong contribution to results, with exchange rates moving markedly in Growthpoint’s favour.
Development is underway for the apartments in the Portswood Ridge and Breakwater precincts and these are due to be released for letting to the market in the third quarter of 2014, explains chief executive officer Norbert Sasse, who says this was a deliberate strategy to bring more people to work, live and play at the V&A Waterfront.
Distributions from Growthpoint’s 50 percent stake in the V&A Waterfront increased by 4.7 percent on a like-for-like basis and contributed 10.3 percent to distributable income.
Commercial property activity
He says the opening of the flagship Pick n Pay store as well as Cross Mall releasing 2 500 square metres of additional GLA, pointing out that retailers have grown sales by 15.2 percent year-on-year driven by tourism numbers, improved hotel occupancy and the weaker rand.
Commercial vacancies sit at 0.9 percent which compares favourably to the CBD vacancy levels, an indication that the V&A remains in high demand for commercial assets.
Meanwhile, he says marine activity in the precinct for the period continued to be in high demand noting that berthing facilities were fully booked for peak periods.
V&A Waterfront developments
“In November 2013, we announced the intention to convert the historical Grain Silo and elevator building into the “Museum for Contemporary Art for Africa.”
“The V&A Waterfront will spend R400 million on the building in partnership with Jochen Zeitz who will lend his art collection and fund the museum’s operating costs,” says Sasse.
It is set to open in 2016 in a 9 500 square metre, nine-storey building that preserves the original structure, and includes 6 000 square metres of exhibition space and an entire floor dedicated to education.
Furthermore, he says in the next two to three years, they have committed between R3 billion and R4 billion for the developments at the Clocktower, Gateway precincts and finalising of the retail plan which is approximately 20 000 square metres and forms part of the existing retail.
“The challenge is getting good returns within the precinct, however, the weak ran should benefit turnover numbers at the V & A Waterfront,” he says. – Denise Mhlanga
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