Cape Town's V & A Waterfront expansion pays off.
Category Development
Public Investment Corporation (PIC) and Growthpoint Properties are reaping the rewards of expanding and refurbishing Cape Town’s Victoria & Alfred (V&A) Waterfront, as the precinct has become the most visited landmark in South Africa, attracting 23 million visitors a year. The Government Employees Pension Fund (GEPF) represented by PIC, together with Growthpoint, the JSE’s largest property fund with assets touching R60 billion, when they bought V&A Waterfront for R10 billion from Dubai World and London & Regional in early 2011, many observers at the time thought that it would take years, if not decades, for the new owners to unlock the iconic precinct’s remaining 220,000m² development potential. But sceptics have been proven wrong. Unlike the previous owners, who did not deliver on grand promises to turn the property into Africa's own Riviera when they bought it from Transnet in 2006, Growthpoint and the PIC have put their money where their mouths are. The new owners have wasted no time confirming their commitment to the ongoing development of V&A. They have already injected more than R1bn into refurbishments and new developments in the two-and-a-half years since they purchased the property. Besides the introduction of a new food court and a major repositioning of the V&A's retail offering, millions have been earmarked to double the number of residential apartments at the V&A to more than 1,000 in the next three years. This is the first time that residential stock is being added to the V&A since 2007 when 515 apartments at the Marina Residence were completed. The first phase of the new residential development, No2 Silo, was launched earlier this year. In less than four months, 26 of 31 one- and two-bedroom apartments were snapped up for R3m-R11m. Asking prices translate into an average R35,000/m², a sizable discount to the R5m-R50m (R45,000/m² - R60,000/m²) typically obtained at the exclusive marina. The last five apartments for sale at No2 Silo, with price tags of R4.295m-R8.925m, were released to the market earlier this week. The development overlooks the V&A's docklands, with views of Robben Island to the north and Devil's Peak and Table Mountain to the east. It is also the first residential development in SA to achieve a 4-Star Green Star rating. V&A CEO David Green said No2 Silo forms part of the new silo precinct, a R1.5bn mixed-use project that on completion will include an 18,000m²² office block, a hotel and leisure component, a public plaza and a contemporary African art museum. The latter will be housed over nine floors in the historic Grain Silo. The Silo precinct is adjacent to the Clock Tower precinct on the V&A's southeasterly border. Green said plans to add more residential developments as well as residential rental stock to the V&A, are well advanced. Construction will soon start on a R225m project to convert the old office space on Portswood Ridge into a total of 271 rental apartments. This will be the first exposure that Growthpoint will have to residential real estate. Growthpoint CEO Norbert Sasse said at the company's recent results presentation that retaining ownership of the V&A's rental stock will create a new revenue stream for the company and "bring in more feet" to support the precinct's retail and leisure offering. "It is in line with the strategy to encourage more people to live, work, play and stay in the V&A," Sasse said. According to Growthpoint's latest financial results, the value of the V&A Waterfront increased nearly R1.2bn to R11.098bn in the 12 months to 30 June. The precinct has clearly flourished in local hands, with retail vacancies plummeting from an above-market 12% two years ago to 0.1% today. Retail sales growth of 16% was recorded for the year to end- June, versus average growth of 6% with the rest of Growthpoint's shopping centre portfolio. A recent study by Economic Information Services places the V&A as SA's most visited landmark, attracting 23-million visitors a year.
Author: SA Commercial Property
