World Cup End Impacts South Africa Real Estate Market
Colombian popstar Shakira visited some of South Africa's new and revamped real estate developments while in the country for her 2010 World Cup performances. Her stay in the luxurious penthouse of the epic Radisson Blu Sandton certainly didn't go unnoticed by the media. That's thanks to the fact that Radisson is the largest international hotel brand in South Africa supporting the World Cup games.
Over the course of the month, visitors were exposed to quite a bit of South Africa's real estate, an opportunity the country hopes to greatly benefit from. With the games in Johannesburg and Cape Town -- and Durban, Pretoria, Port Elizabeth, Rustenburg, Polokwane and Bloemfontein -- came new hotels, new stadiums and new large-scale real estate developments hoping to advance the African nation.
Now that the month of excitement has ended for the Rainbow Nation, and Shakira has performed "Waka Waka" at Johannesburg's Soccer City Stadium for the last time, development continues.
Can a world-class sporting event sustain a developing country's real estate market?
Some $5 billion was allocated to infrastructure and World Cup preparations by the national, city and provincial governments. Besides security, domestic public transportation was added and improved, roads were repaired and the eight host cities were given fancy facelifts.
Johannesburg built the Gautrain, Africa's first high-speed rail that links the financial center of Sandton (and the Radisson Blu) and the OR Tambo International Airport. But the questions remains on how much the games will have benefited the country economically and developmentally following the conclusion of the global event.
Preparing for the events boosted activity for sure, the Ministry of Finance has said that stadium construction created more than 130,000 jobs and contributed $267 million to low-income families.
South African president Jacob Zuma expressed his intent that a successful World Cup will seduce tourists and encourage investment and trade to the country for the future. The Department of Tourism set their goal to bring in 14 million tourists annually by 2014. That's a 45 percent increase from the 9.6 million who visited in 2009.
Cape Town has added a second Radisson to the mix. Local South African developers REALCOR Cape recently developed the Radisson Blu Blaauwberg Beach Hotel. The hotel joins the chain with locations also in Port Elizabeth. The property is trying something different by offering investors the opportunity to become shareholders in the property.
"A lot has changed in this country and more South Africans and tourists discover they want to own property here," says Jacques de Ridder, the director of construction for REALCOR. "The excitement around the World Cup will bring people to take a look at the property and then hopefully they will want to return."
Another development promise for South Africa is their possible bid for the 2020 Olympics. Given they have these new and refurbished facilities, it could help their chances of hosting. Critics say the five new stadiums won't reach capacity after the World Cup (and rarely did during) so at the moment some stadiums are planning to reduce their facilities and examine how sustainable they are for the country.
"The world is looking at South Africa for the first time this way," says Dr. Laurine Platzky, 2010 FIFA World Cup Coordinator under the Department of the Premier in the Western Cape. "We already have large-scale developments before the World Cup and they will only increase after the World Cup once the world is able to see the opportunities and what a rich and beautiful country South Africa is."
Article by: Shira Levine - www.housingwatch.com