Pre-furnished apartments in high-end developments across the country are on the radar of local and international investors.
Leading South African property developer, the Amdec Group, has found that residential properties within their major developments ‒ Melrose Arch in Johannesburg, The Yacht Club and the new Harbour Arch in Cape Town ‒ are in great demand by buyers who plan to rent out their units, holding onto ownership as a long-term investment.
“The majority of purchasers within this type of development are investors who are buying to let,” says Tersia Taljaard, sales consultant for the Amdec Group.
“Some investors have bought as many as 10 apartments in a single development, and buyers even form consortiums to buy together.
“There are also those clients who prefer the ‘buy to live’ option. They are typically scaling down from larger properties, or purchasing a second property for use on regular business trips,” she says.
Over and above the investment, however, these buyers are also looking for a “hassle-free” experience post sale.
One on Whiteley, the Amdec Group’s latest residential complex within the company’s award-winning Melrose Arch development, is seeing increased interest from buyers seeking fully furnished flats that are ready to rent out.
“Melrose Arch’s rental market mainly caters for corporates and professionals, which means that the apartments need to be furnished,” explains Taljaard.
“Most of our investors prefer to have us arrange the furnishing based on a pre-agreed budget, and they often want us to find tenants for them too.
“Furnishing a new apartment is not an easy task and many of our buyers don’t have the time to do this, or they’re foreign investors who aren’t based in South Africa.
“Our investors also see better yields when renting an apartment furnished, so for a small capital outlay at the outset, the returns are definitely worth it,” she says.
According to developments manager of Pam Golding Properties, Peet Strauss demand for furnished apartments is currently higher than that for unfurnished living.
“Our furnished rental market is particularly great for overseas guests who arrive with just a suitcase. They can move in and start working the next day. They don’t even have to set up wi-fi ‒ they just punch in a code and off you go. It’s literally as easy as that,” says Strauss who lives, works, and owns investment properties in the mixed-use development.
“More and more overseas companies are moving into Melrose Arch. People come from Europe or America and they absolutely love it because of the high-street feel,” Strauss says. “Many international business people rent here when they are in Johannesburg.”
Chris Weylandt, Founder of Weylandts Spaces, says that the trend of fully-furnished apartments has been significant.
“We do a lot of bespoke interior design that expresses the unique personalities of clients, and we are seeing an increasing number of clients who are also investors who need to have their apartments furnished, often from the other side of the country or the world. That’s where Weylandts Spaces offers a valuable and sought-after service,” Weylandt explains.
“Locally, there is considerable demand for upmarket, five-star interior design in new developments. We’ve also noticed that opportunities are opening up within the international market. Weylandts Spaces has worked on developments in France, Germany and in West Africa. In Europe, the so-called ‘poshtel’ ‒ upmarket youth hostels or affordable hotels ‒ is also gaining popularity. With up to 300 rooms in a single development, these projects are highly lucrative, especially when you consider our ability to manufacture locally and offer favourable exchange rates.”
Is investing in quality furnishings, and the handling thereof, therefore a wise investment? Taljaard says it is, particularly considering the time saved.
“We have parents in Johannesburg need a furnished flat for their children at The Yacht Club in Cape Town, while they’re studying at UCT. It is very convenient, and a great relief, to know that everything will be done without them having to be there.
“With the increasingly fast pace of life, and so much to do on any given day, it makes it so much easier when a company handles the furniture aspect on the investor’s behalf. Or if someone is buying to live in the apartment, they’re typically reducing the furniture they’ve accumulated over the years. They’re simplifying their lives, so they don’t want to concern themselves with every detail of the décor. They just want things sorted quickly,” she concludes.