Semigration fueling Cape Town property market
Category Property news
Earlier this year, Lighthouse Properties reported that 43% of homeowners who sell their properties in Gauteng, buy another property in a different province - and of this percentile, 36% are buying in Cape Town and the Western Cape.
This semigration is believed to be underpinning Cape Town's resilient property market as skilled workers, entrepreneurs, and big corporates migrate in favour of the metropole to find work, set up businesses, and relocate their offices.
"With the outlook for tourism on the up and positive data released by Western Cape promotion and investment agency, Wesgro, Cape Town will lead the recovery of the property sector across all assets," said Quintin Rossi, CEO of JSE listed property group Spear REIT.
Rossi attributes this recovery largely to semigration, as an increase in buyer activity has been noted by the residential property sector as people move from Gauteng and KwaZulu-Natal to the Western Cape.
Rossi said that although the national and global economic outlook remains difficult to navigate, the city's property sector is fast-tracking its recovery.
During Spear's pre-close investor presentation, Rossi pointed out that Cape Town's office, retail, and industrial occupation rates are showing a healthy bounce-back as the return-to-work trend continues and companies begin to focus on growth and recovery.
Spear, which has 32 properties within its regionally specialised R4.6 billion portfolio, showed a close on 94% occupation rate from March 2021 to the end of February 2022, with a portfolio comprised of 100% in the Western Cape.
Apart from the obvious lure of the Mother City, semigrants are said to be in search of safety and security, lower pollution, and a better quality of life, and South Africa has some unique factors that support the trend:
Unrest
A recent comment from First National Bank property strategist, John Loos attributed the unrest and looting in KwaZulu-Natal and other regions of South Africa in July last year as another important factor for businesses to relocate. Many people sitting on the fence, have now accelerated their plans.
Municipal Management
The Western Cape and Cape Town's municipal districts have earned a reputation of being well-run and effectively administrated. Maintaining current infrastructure and rolling out future projects, such as current efforts to reduce reliance on Eskom, make a great investment case for the region.
The Western Cape government's policy is to ensure that the city and province have the necessary infrastructure and technology to support business and investment in the region.
International Investment
Top international companies such as Johnson & Johnson, Microsoft, and Reuters have set up facilities in Cape Town. Following suit, US retail giant, Amazon will be the anchor tenant at the Cape Town-based R4.5 billion residential and commercial property development expected to create 5,239 jobs in the construction phase alone.
Western Cape-based South African tech companies have continued to attract international investment with Fintech firm Clickatell announcing an additional R1.3 billion capital raise via the international investor market to further boost its growth ambitions on the African Continent.
The Western Cape has established itself not only as a top international tourism destination but as an economically viable investment case for tech firms, green energy companies as well as South African and foreign families seeking to re-establish themselves.
The result brings benefits across the residential, retail, commercial, and industrial real estate sectors of the Province.
This article appeared on: https://bit.ly/3yMWeAB
Author: Mathew Bessesen
