SA: great value for money
This year’s exciting soccer extravaganza opens South Africa’s window to the world. Professionals view the World Cup as a marketing opportunity which will engender, hopefully, positive returns — for the economy in general and tourism in particular. Property should also gain, but more in the long run.

From a business point of view it makes sense to look beyond the thousands of soccer fans expected. They will have a great time — and doubtless shift an amazing amount of beer and wors. But a significant portion of visitors will be well-heeled businessmen, sporting administrators and the high net worth individuals (HNWIs) to be found at any global fun feast. Then there are the Fifa officials, the media crews and last, but certainly not least, the players and coaches, themselves among the highest paid celebrities in the world.

Tourism and hospitality professionals have long said that the real benefit of the Fifa 2010 Soccer World Cup will take years to filter through. Foreigners will have time to enjoy the beauty of South Africa and to take advantage of what the country offers. And one of these is value for money!

Take residential property. Most of the rich and famous have multiple homes, usually in the very best locations. They want, and get, the best that money can buy. That’s why property in exotic places like the South of France, the Caribbean and major glamour cities is so expensive. Apart from enjoyment, the super-rich know that prime property is an excellent way of preserving wealth. As a result the tried and tested playgrounds and investment hotspots of the rich and famous are still the place to be. However, the very cost of venues like France’s St Jean Cap Ferrat (the most expensive property in the world) is forcing even the beautiful people to discover new idyllic havens. The modus operandi has become adventure and educational travel. As a result, last year South America was the place to be, says UK’s Ledbury Research, which specialises in helping brands understand and reach the wealthy.

Following the global financial meltdown, the market for luxury homes took a nosedive, with some prices falling as much as 25 percent. Despite these price falls, Monaco stands out at the head of the field with an average value of 50 000 euros per m² for the best city properties, according to research by Citibank. London was hit hard by the fall in sterling and came second at 28 000 euros per m², followed by Manhattan, Moscow, and Paris at around 16 000 euros, Tokyo (15 800 euros), Hong Kong (15 700 euros), Rome (13 500 euros), Singapore (11 800 euros) and Sydney (11 000 euros).

When comparing those prices with luxury residential properties in South Africa, one cannot but be struck as to what value for money is available in this country. In Johannesburg, for example, a newly-built 600m² Sandton apartment recently sold for R35-million, which equates to R60 000 per m² (approximately 6000 euros per m²). At Melrose Arch, R20 000 per m² has been (approximately 2500 euros) achieved. A new stage is expected to go on the market at around R30 000 to R32 000 per m².

Cape Town: adored, desired and cheap

In Cape Town, with a seafront that compares favourably with the best of the Cote d’Azur in popular opinion, probably the most expensive home sold yet went for around R80 000 per m² (roughly 9000 euros), which is still below Sydney’s prime number.

According to research, the 30 percent or so slump in the luxury market bottomed in early 2009 and high net worth individuals are back. However, there is a trend towards new horizons. Brazil has considerable untapped potential. The country’s exotic, offbeat character appeals to those seeking something different. Average values are relatively low — resorts along the north-east coast cost US$1400 per m² for villas and US$1900 per m² for apartments. Certain Caribbean spots are back in favour, including Barbados where property transfer tax has been reduced to 2.5 percent and foreign exchange controls have been lifted. A three-bedroom apartment in a waterfront development in St James, Barbados, could be had for $1.7-million.

Italy is also making a comeback for those who enjoy the countryside. Bordeaux too is enjoying something of a renaissance. There is increased interest in its vineyards from Chinese investors following Hong Kong’s abolition of import tax on wine.

The Cape winelands have figured strongly in the past on the buying lists of foreigners. It is expected that a number of HNWIs visiting South Africa for the Soccer World Cup will be checking out any top class wine estates on the market.

The same goes for game farms, which are a great favourite with overseas investors. Comments Wayne Rubidge, manager of Pam Golding Wildlife Properties: "There is no other country in the world that offers a wildlife and game farming experience like South Africa. All areas of the country are easily accessible and the supporting wildlife service industry of taxidermists, game capture, translocation, veterinary services and sales is the most sophisticated in the African continent and arguably in the world."

Game farms in, for example, the Eastern Cape range in price from R2000 to R10 000 a hectare (approx 2.5 acres). PGP recently sold a 3300 hectare game farm to a Danish buyer for R10.5-million. Another popular area is the Karoo. Rubidge has a very special flagship property (10 000 hectares) for sale in the Bo Karoo near Colesberg for R43-million. The farm is being sold complete with vast herds of plains game and breeding herds of buffalo and rhino. It has miles of the Seacow River running through it.

This article first appeared in Pam Golding Properties' Intellectual Property Magazine.

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