Cape Town - The luxury sector in South Africa generated revenue of about $2.2bn (about R27.28bn) in 2017, slightly less than the $2.3bn in 2016, according to the South Africa 2018 Wealth Report released by AfrAsia Bank and New World Wealth this week.
These figures include luxury cars, luxury clothing and accessories, luxury watches, private jets, yachts and luxury hotels and lodges. Luxury hotels are the largest component.
The report defines the super-rich (high net worth individuals) as those with wealth of $1m (R12m) or more. "Wealth" is defined as the net assets of a person. It includes all their assets (property, cash, equities, business interests) less any liabilities.
According to the report, the South African luxury goods market is dominated by foreign brands. However, there are a few local SA brands that make luxury and semi-luxury goods like Ardmore Ceramics, Avoova and Carrol Boyes. The report predicts that this sector will grow strongly over the next 10 years.
The report found that the luxury clothing sector in SA performed poorly in 2017, possibly due to increased competition from semi-luxury and premium brands.
Luxury car sales in SA were down in 2017 compared to 2016. However, luxury SUVs are especially popular among SA's super-rich, according to the report.
Porsche Cayenne (Supplied):
The super-rich indicated that they like the high road clearance these SUVs offer and, their ability to handle potholes and bad roads better than luxury sedans and sports cars.
BMW X6 (Supplied):
Safety aspects, space for children and usefulness for off-road holidays are other reasons they like luxury SUVs. Popular brands in this caregory are Porsche Cayenne, Range Rover, BMW X6 and Mercedes GLE Coupe.
This, however, does not mean that those with R12m or more in SA do not still like their sports cars.
The most expensive of these is the Rolls-Royce Phantom at $420 000 (about R5.2m), followed by the Ferrari F12 Berlinetta (about R3.84m); the Rolls Royce Ghost (about R3.65m) and the Ferrari 458 Italia (about R2.97m).
Rolls-Royce Phantom (Supplied):
As for classic car prices, the report estimates it increased by about 160% over the past 10 years in dollar terms making it the best performing investment class for wealthy people globally.
Local classic car auctions take place in Johannesburg, Cape Town and Knysna on a regular basis.
Ferrari 250 GTO Berlinetta (Supplied):
The most expensive classic cars among those with wealth of R12m or more in SA are the Ferrari 250 GTO (produced in the 1960s) which is valued at about R288m; the Ferrari 250 GT California Spider, also produced in the 1960s and valued at about R240m; the Ferrari 250 Testa Rossa, produced in the 1950s and valued at about R216m; the Bugatti Type 41 Royale, produced in the 1930s and valued at about R192m and the Porsche 917, produced in the 1970s and valued at about R120m.
Luxury hotel revenue in SA was up slightly in 2017 compared to 2016. According to the report, this was assisted by the easing of visa restrictions on foreign visitors.
Popular SA hotels for the world’s wealthy include the Lost City, the 12 Apostles Hotel & Spa, the One & Only, the Table Bay, the Sandton Sun, the Mount Nelson, the Michael Angelo, the Beverley Hills, the Oyster Box, the Westcliff and the Cape Grace.
Palace of the Lost City at Sun City (Foto24):
Popular SA game lodges for the super-rich include Singita, Ngala, Bushmans Kloof, Royal Malewane, Phinda and Londolozi.
There are also a large number of small boutique hotels in SA that appeal to wealthy people. Examples include Ellerman House, La Residence, Franschhoek Country House, Birkenhead House and The Plettenberg.
The super-luxury watch segment is still performing well in SA. The report states that this segment has been growing steadily over the past few years. Examples of super-luxury watches include Patek Philippe, Franck Muller, Breguet, Vacheron Constantin, Ulysse Nardin, Blancpain, Audemars Piguet, Roger Dubius, A Lange & Sohne, Richard Mille, Greubel Forsey and FP Journe.
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