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Monday Aug 06, 2018

Land debate 'spooks foreign sales'

The land restitution and expropriation of property without compensation debate has dented sales to foreigners for the R450 million redevelopment phase of the Cape Quarter in Cape Town by listed Tower Property Fund.

The Tower Property Fund’s residential development at 32 Napier Street in Cape Town.

Chief executive Marc Edwards said this week that the Cape Quarter was a precinct that traditionally attracted a lot of international cash buyers in the past.

Edwards said the development had however become susceptible to movements in confidence and investor sentiment.

He said Tower had received "excellent offers" on the penthouses but the rest of the market was flat.

Edwards said Tower remained hopeful that the market would stabilise once there was certainty about the policies.

He said South Africa had a lot of property investment opportunities, which he believed was related to the volatility in the country.

"We can pick up commercial opportunities for a little bit cheaper than a year ago," he said.

Edwards said Tower had launched 55 residential apartments this past weekend in the Old Cape Quarter and had very encouraging interest on the penthouses.

But Edwards said the residential market was pretty flat at the moment and that seemed to be "a Cape Town thing".

"Anecdotally, we are hearing that the land restitution commentary that is in the press is making international investors a little cautious," Edwards said.

"That is anecdotal. We have not physically experienced that ourselves."

Edwards said the apartments were available to buy off plan and the development would probably take about two years from now to complete.

He said the R450m project included current commercial and retail section that Tower already owned, with the new building costing about R250m.

"If we sell all those units out at the budgeted price, which we hope to do although it might take us longer in this market, it will bring quite significant profits for the company," he said.

Edwards said the apartments were priced on average at about R79 000m2 excluding VAT, adding that Tower achieved R90 000m2 on its nearby Napier Street residential development.

The Sunday Independent


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