Cape Town property: on Russia’s radar
Wealthy Russians buying mansions overseas is hardly new: just see London. Now Cape Town is becoming one of the target cities, spurred by the lifestyle and scenery – and helped by the rand’s decline that is making high-end property that bit cheaper.
Luxury property giants Sotheby’s International Realty in South Africa says buyers from Germany and England are still interested, but the Russians are beginning to get noticed as well.
According to Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty: “Roughly one-third of investors in top tier properties in exclusive areas like Clifton, Camps Bay and Llandudno are from the UK, Germany and, increasingly, Russia.”
“We sold a landmark property, the Lichtenstein Castle in Hout Bay, and this was sold to a Russian entrepreneur for R23m ($2.3m),” Geffen says, adding that: “there was an offer put in for R250m ($25m) on a very expensive property in Camps Bay by a Russian. Unfortunately the deal didn’t happen, because the seller wanted 300 on the dot.” Geffen attributes part of the upswing in interest to the devaluation of the rand.
Sotheby’s Russian office has also seen an interest in Cape Town. Nadezhda Kot of Sotheby’s International Realty Moscow says (as quoted in South African media) “We are actively marketing South African properties to our clients and Cape Town in particular ticks all the boxes our clients are looking for in terms of climate, lifestyle and natural beauty, but are still value driven. The current weakness of the rand has certainly attracted attention in Moscow.”
So what does your cash get you? Speaking to beyondbrics from Cape Town, Anne Porter, chairman of luxury property sellers Anne Porter Knight Frank, says: “If you take the Waterfront, which is on the Atlantic Seaboard, entry level would be about R6m, with an average or R10m, but going up with the highest at R60m currently on the market.”
Both Anne Porter Knight Frank and another agent Pam Golding’s Atlantic Prestige office say that the Russians are showing a definite interest in the Cape Town market. Porter, who recently took a keen Russian couple to view a property, explains the general trend. “They are getting an incredibly good deal in terms of property as a result of the currency rate – although that applies to all overseas buyers,” she says, adding that, “South Africa has been perceived as quite a good venue: [it] offers an incredible lifestyle particularly in the Cape. We’ve got all the sort of things that people like, the sea, the mountains, the Winelands, the entertainment, and it’s a very, very cosmopolitan area.”
There’s no question about the Russians’ spending power. According to Knight Frank’s 2013 Wealth Report, which gives a global perspective on prime property and wealth, Russia now ranks alongside Switzerland and the US in the top ten countries for billionaires list. As of 2012, it had 102 billionaires, a figure set to hit 126 by 2020.
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Russians have all the money as the price of property in Central London can tell you!