Somerset West stands out as one of the fastest growing property areas – commercial, residential and industrial – in the Western Cape, according to a new report on the state of the property sector in the Western Cape.
The report was released on Monday by Wesgro, the official tourism, trade and investment promotion agency for Cape Town and the Western Cape.
This first edition for the financial year 2018/19 is expected to form a baseline for similar annual and even more expanded annual reports going forward. The aim is to provide current and potential investors with a "one-stop" guide to what is happening in property sectors in key nodes in the Western Cape.
Carola Koblitz, the report’s editor and chief researcher, told Fin24 a key finding was that areas like Blackheath and Montague Gardens in Cape Town - traditionally seen as industrial areas - have since also developed a low-cost housing segment.
However, it seems the only vacant land still available for industrial development in the greater Cape Town area is in Blackheath and Somerset West.
Put speculation at bay
Koblitz says that the report has consolidated a large amount of data, and it would now be up to interested parties to go and take a closer look at those sub-sections that are of particular interest to them.
"The data in the report basically helps to put speculation at bay about what the situation is in given areas," says Koblitz.
For office rentals, the report found that strong markets exist in towns such as Stellenbosch, Paarl and George. There are, for instance, office nodes in Stellenbosch that are achieving higher rentals - up to as much as R305/square metre - than prime nodes within the City of Cape Town such as the V&A Waterfront or Claremont, where top commercial rentals will fetch around R220/square metre.
In an area like Woodstock in Cape Town, several office rentals are also available, and a number of properties are on the market. Koblitz says this could be because Woodstock is an area "in transition".
Deon van Zyl, chair of the Property Developers Forum in the Western Cape, said at the launch event that the construction industry is "imploding". Yet he sees the new report as showing that there are good opportunities still to be had in the Southern Cape and Saldanha area, and that Cape Town still offers good returns.
According to Tim Harris, CEO of Wesgro, the aim of the report is to enable current and future investors to make the best possible decisions in terms of where to base their operations within the Western Cape, whether they are looking to set up a factory in an industrial area, opening a corporate office or even determining the areas in which their staff can find homes.
"Almost no investment deals [that] we as Wesgro do, have a property component involved. That is why it is so important to have an up-to-date and well-informed analysis of data so that we can make an investment case for the Western Cape," said Harris.