Along with the usual sectional title residential living that has blossomed in apartment blocks in the Cape Town CBD over the past two years, another type of residential is fast becoming a favourite lifestyle choice.
Following in the wake of large cosmopolitan downtowns such as Manhattan, London and Paris, purchasing sectional title units in which to live full time in a vibrant, working hotel is also gaining popularity, says Rob Kane, chairperson of the Cape Town Central City Improvement District (CCID).
“We’re now seeing this option available in hotels ranging from those catering to the top end of the leisure market to those usually aimed at the economy traveller. Currently, hotels in the CBD offering fulltime residential options include Taj Cape Town, Mandela Rhodes Place, 15 on Orange, North Wharf Protea, Fountain Suites, and The Pepper Club.”
Michael Pownall, Taj Cape Town’s general manager, says: “Hotel residential living has been available in many global cities for many years. It was bound to become a trend in the Cape Town Central City eventually. The lifestyle is very appealing as it is hassle free for the owner/occupier, with the hotel providing all required services such as laundry, housekeeping, repairs, security and concierge as well as spas, restaurants, bars, coffee shops etc all under one roof.
“This is particularly attractive to people downsizing and looking for convenient 'lock up and go' options. Plus, it fits in with the general global trend of downsizing property sizes and the attraction of living in city centres. And there is a possible income return for the owner if the residence can be used by the hotel when the owner is absent for periods of the year.”
A member of the Leading Hotels of the World, units in the upmarket complex currently range in internal size from around 73m2 up to 111m2, and in price from R2.995 million to R7m. Notes Pownall: “We designed these Taj Residences from the very start of our development of Taj Cape Town back in 2008, as it reduced the debt burden of the hotel development by selling off a number of suites within the hotel.”
Richard Boxford of real estate agency Life Residential has sold a number of units in Mandela Rhodes Place, where today approximately two-thirds of the complex is owner/occupied or long-term rentals, and one-third managed in the hotel rental pool: “We have a steady, regular flow of interest – it is a popular residential complex and sought after by buyers and tenants alike. The general pattern has been that larger two-bedroom apartments have sold to clients wishing to use these as their primary residence, while studios and one bedrooms tend to sell to pure investors looking for a good return.”
Units sold in the building over the first quarter of 2015 have ranged in price from R1.375m (for 51m2) to R3.7m (for (153m2).
After a slow start some 10 years ago, says Laurie Wener, a director at Pam Golding Properties (PGP) and MD of the Western Cape operation, traction in the sectional title hotel product has begun to take traction. “Similar trends in the business hubs of international cities and Gauteng have led the way for Cape Town to follow. It is primarily an investment product where rental return is as important as capital growth and the choice of operator underpins the appeal substantially.”
Basil Moraitis, PGP’s area manager for the Atlantic Seaboard and City Bowl, agrees: “This is only now starting to appeal to buyers as an alternative to traditional sectional title scheme – it’s still in its infancy.” However, stresses Moraitis, the value lies in the hotel’s reputation and level of operation: “A hotel with an excellent, well-known international operator will ensure that the resale value is maintained.”