Never-say-die investors in buy-to-let are continuing to absorb developments in the Sandton CBD, despite investment yields of 5% or less.

Limestone, the agents specialising in the area, claim to have sold 160 of the 250 units in Hydro Park on Grayston Drive within three weeks. It's a new development over the road from Westpoint, a new 220-unit development that is finally fully let.

Prices at Hydro Park range from R699 000 to R1,2m. It will be ready for occupation at the end of next year.

Limestone's Jarod Kolman says: "Buyers have no yield consciousness, they are looking at capital growth only."

But, he says, rents appear to be rising. "They fell to R4 000/month for a two-bed flat at Westpoint early this year. Now that they are fully let, the most recent leases have been signed at R5 250.

"We have created a rental market in Sandton and we expect the demand to continue rising."

Jawitz CEO Herschel Jawitz agrees that the market appears to be bottoming. "Our staff have been surprised by the number of letting inquiries," he says. "Rents in the middle range of high-rise apartments are still weak, with two-bed units letting at as little as R4 000/month. But demand from the bottom end, from high-net-worth tenants and from corporates is strong."

Says another letting agent: "I'm surprised at the high rents we are getting on some properties."

Article from: Financial Mail