Luxury rental market attracts foreign tenants

By Niki Jackson

It’s not surprising that a cooling off of foreign buyer transactions in South Africa, previously reported at about 1% of the total residential market earlier this year, would occur as heartier performances are delivered by the Rand. However anecdotal evidence reveals that this has done nothing to dampen the appetite for a luxurious South African lifestyle, for the overseas elite.

When it comes to the uber-luxurious rental market, that’s property rented in excess of R80 000 per month and above, foreigners are making up around 75% of the tenants, so while buying may have slowed down, this doesn’t mean that they are not wanting a foothold in South Africa. This is especially true in sought-after Cape Town where sprawling mansions in suburbs like Bishopscourt, Constantia or the riviera of Clifton are generally anticipated on a list of over R100 000 rentals. But don’t be surprised if you come across a fashionably designed and furnished, three bedroomed apartment, with iconic views of Table Mountain and a rooftop pool, in the very heart of the mother city, for R125 000 per month.

North of the country in the economic hub of Johannesburg, uber-luxury rentals are far from out of place, with several properties boasting over R100 000 price tickets in prominent areas like Sandhurst, Westcliff, Bryanston and Houghton.

“Justifiably, rental properties with hefty price tickets also come with hefty tenant-expectations.”

Who, indeed are the tenants of a triple figure rental you might ask. Experts tell us that around 50% are reportedly corporate lets, with a growing trend towards organisations preferring that the lease be in the name of the high level executive.  Landlords on the other hand are often either owners who have relocated and are not yet ready to sell, or simply investors, who are diversifying their wealth.

Justifiably, rental properties with hefty price tickets also come with hefty tenant-expectations.  Extraordinary features run into long lists of dreamy descriptions of exclusive locations and architectural and interior design. Staff and guest accommodation is a must, as are magnificent entertainment areas, home-automation and extensive garaging.  But above all, privacy and state-of-the-art security are the non-negotiables.

Concluding a lease in this very specific segment of the rental market, which by the way is so defined that it has little to no bearing on the rest of the market, is understandably complex and often involves multiple viewings and third party negotiations.

Posted by The Know - Pam Golding Properties