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An international study says around half of high-net-worth individuals (HNWIs) want to buy at least one luxury home in the next 12 months, and that South Africa is one country that they’re considering.
But what exactly are HNWIs and ultra-high-net-worth individuals (UHNWIs) looking for and how can developers attract their attention in a competitive world? We consult local as well as international property experts to find out how developers can stand out from the crowd.
Get the right location
Cape Town is a favourite among international investors, and it’s easy to understand why. The city has everything – sea, beauty, open spaces and wine farms, and is ranked one of the top tourism destinations in the world. Developers based in the Mother City therefore have an easier time at marketing their properties.
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‘Cape Town is seen as more internationally recognised for investment than Durban and Johannesburg. It’s certainly where a lot of foreign investment is taking place – primarily in residential and also commercial,’ says David Williams-Jones, group chief executive officer of property development company FWJK.
Make use of social media
Williams-Jones says he’s had much success promoting his developments on social media. ‘We advertise in English and we generally use Facebook and Instagram, and get a good response. We do our own campaigns, which we generate ourselves.’
A professionally shot cover image is bound to get attention. ‘What attracts interest is the opening picture. We have our own architectural division, and we like to think we know what the market likes. They like slick architecture – not too flashy but tasteful.’
A point of differentiation
Andrew Weir, chief executive of London Central Portfolio, points out that, in London, developers can often fall into the trap of creating anonymous-looking buildings because they’re cheaper to build.
This, he says, is a universal problem: ‘What makes a development sell well in London is that it looks like “London”. If you wake up and look down your street, you want to know you’re in London. You don’t want to look out and think you could be in any other city, like Dubai, or in America.
‘I would recommend that people stick with unique architecture that is specific to the territory. In London we have a lot of new builds that look the same. They do sell and rent, but they don’t appreciate too well.’
Offer something new
Sean Woolley, founder and director of leading real estate agency Cloud Nine Spain, says that for the Costa del Sol market, developers are constantly having to offer something new.
Recent design features that have attracted new buyers include larger-than-average terraces, open-plan living areas, and enhanced site amenities that include a gym, indoor pool, concierge services and co-working spaces for residents.
Woolley adds: ‘It’s also important to offer a selection of furniture packages designed specifically for the properties so that the entire purchase process is streamlined and made easier for buyers.’
Get the retail right
An important component of a mixed-use development nowadays is to ensure that the best mix of retailers is installed in the gross leasable area. But simply sticking in chains such as Primi, Vida e Caffè, etc., doesn’t always appeal.
Weir says: ‘I think people go on to chase big brands because it is easy, but the way people shop has changed. If developers can attract bespoke retailers that can’t be repeated elsewhere, they would be more successful.’
Mixed-use development, 16 on Bree, which was created by FWJK, gets this right with its positioning in the heart of hip Bree Street with its art galleries, antique shops, artisanal restaurants and contemporary bars on its doorstep.
Williams-Jones adds: ‘I think investors want convenience. We have a whiskey bar opening up near 16 on Bree, which is quite unique. There people can have a beer and whiskey and a light meal.’
Allow short-term lets and office working
Williams-Jones says 16 on Bree has also catered to the demand of being able to offer short-term lets. He says that this caters to the ‘swallows’ – investors that visit for six months of the year and let their properties out for the rest of the year.
He adds: ‘With 16 on Bree, the owners are allowed to offer short- and long-term lets. We’ve facilitated this with the help of short-stay managers, and a concierge service that offers that “hotel feel”. It also offers a workspace, where people can book a boardroom. The building is a one-stop shop.’
Meet energy needs
Last year a report in biznews.com highlighted that European businesses are delaying investment in South Africa because of poor power and water supply. No doubt HNWIs and UHNWIs are feeling hesitant too.
One could point out that South Africa is not the only country that falls woefully short on its electricity capacity. Due to poor planning, California in the United States finds it hard to cater to all its residents when they simultaneously crank up the air conditioning during the state’s notorious heatwaves.
But pointing this out won’t wash with investors. What they want are contingency plans. Williams-Jones adds that – in spite of developments like 16 on Bree sitting in the heart of Cape Town’s CBD, which suffers no load shedding (at least for now) – the company has ensured that there’s solar power with battery storage: ‘You have to plan for this [load shedding] for the foreseeable future. It’s definitely a deterrent to investors if this is not done.’
