Cape Town’s East City Precinct attracting European and US buyers despite pandemic

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15-09-2020
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Property Funds World
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Just nine months after launching to market, 63 per cent of The Harri, a new 48-unit apartment block and mixed-use property development going up at 75 Harrington Street in Cape Town’s East City Precinct, has sold off-plan.

Only 16 of 42 studio apartments remain unsold, while just two of the six loft apartments are still on the market.

Construction has already begun, with a completion date of April next year. This follows neighbourhood construction which began last year of a new mixed-use development at 84 Harrington Street, which includes retail units, a restaurant, co-working space and residential living, and the recently completed The Harrington, a new mixed-use retail and commercial development at 50 Harrington Street. “We sold right through lockdown,” says Jeff Kleu, co-developer with Steven Lampert, both of property-development company Sepia and Silk, which bucked a trend of national property sales plummeting by up to 70 per cent in the month following South Africa’s hard lockdown that began at the end of March. “We sold to German and USA nationals wanting to buy to rent, or to buy as their holiday apartment, as well as to neighbouring Zimbabweans and South Africans.” The Harri’s units are priced between EUR65,294.37 (USD78,183.96) and EUR101,222.25 (USD120,283.18) for a studio apartment ranging in size from 24,5 sq m to 32,5 sq m, and EUR126,458.51 (USD150,354.05) for a two-storey loft apartment. The development, which is optimally located in the heart of Cape Town’s design district, offers a blend of apartment living with open-plan, tastefully furnished co-living and co-working space, and includes fireplace lounges, a TV room with a large smart TV and access to Netflix, three dedicated Zoom (video chat) rooms, a rooftop terrace with a gas braai and mini-bar area, and hotel-grade amenities like wifi, a concierge, a housekeeping service, and 24-hour security. Right now it’s a buyers’ market, Kleu notes. “Since we launched, interest rates have dropped from 10.25 per cent to 7 per cent,” he says. “This plays directly into the hands of the buyer because they’ll be paying substantially less on mortgage instalments, or it enables them to buy a much better apartment at a higher price point.” Harrington Street has been at the heart of much of the recent revival of the East City, which was previously a gritty industrial-commercial area. Major developments here include the upgrading of the Cape Town City Hall at a cost of EUR1.36 million (USD1.6 million), The Old Granary at EUR1.56 million (USD1.86 million), the purchase of the Nicro head office on Harrington Street by a European company, Groupe SOS, for EUR1.5 million (USD1.8 million), and the opening last year of a EUR3.7 million (USD4.5 million) five-star boutique hotel on Church Square. Sandra Gordon, research economist for Cape Town’s Central City Improvement District, points out that while development activity was initially concentrated at the lower end of Harrington Street, developers have shifted their attention to the area above 50 Harrington Street, and she cites as examples both The Harri and 84 Harrington Street. “Numerous applications submitted to the City suggest that a variety of new retail and food outlets are set to open their doors, which will really cement the East City’s reputation as a trendy precinct that sees people flock to the area at the weekend,” she adds. Kleu agrees, and notes that the magnetism of the area lies in its revival of old historic buildings in beautiful retail stores, galleries, artisanal bakeries, restaurants and bars, as well as its close proximity to Gardens Shopping Centre, Virgin Active Wembley Square, and several MyCiti bus stops. For Joburgers or foreigners, the fact that it’s in the heart of the city, and only a few minutes’ drive from iconic tourist hotspots like Table Mountain, the V&A Waterfront and the Atlantic Seaboard’s “golden mile” beaches, adds immeasurably to the appeal of the area.