The real lure of a luxury high-rise in the City of Gold
Category News
Johannesburg's millionaires and billionaires are lining up to join the worldwide move among the super-wealthy towards high-rise living in luxury apartments and penthouses - and increased security is not their only motivation.
"I can think of half-a-dozen multi-millionaires who have just recently given up a northern suburbs mansion in favour of a luxury apartment," says Rory O'Hagan, who heads up the Luxury Portfolio© division of Chas Everitt International, "and we have seen this develop into a strong trend over the past year.
"This city has the biggest concentration of high-net worth individuals in SA, and they are increasingly following the example of their affluent counterparts in other major business centres like New York, London, Hong Kong, Tokyo and Sydney, who often choose luxury apartments for city living and invest in houses and bigger properties only for recreational use and only in more rural areas or their holiday destinations
"As a result, some very upscale apartment blocks in Sandton, Morningside, Hyde Park and Houghton which were previously slow sellers are now in high demand, with buyers being prepared to pay more than R60 000/sqm for a penthouse in the prime Embassy Towers development in Sandhurst, compared to previously quoted record prices of R45 000 to R55 000 in buildings like Michaelangelo Towers. Meanwhile in The Houghton, luxury apartments overlooking the golf course are priced at R48 000/sqm."
The increased privacy and personal safety offered by these buildings is of course a big attraction for many super-wealthy buyers, with high crime rates in most large cities making it difficult - and costly - to secure a large suburban home with extensive grounds. At the same time, the residential estates that may offer a viable alternative in terms of high security are often too far from the financial "action" - and made less attractive by rising levels of traffic congestion.
Convenience is also really important to these buyers, many of whom are empty-nest baby boomers and dual-income millennial professionals who want quick and preferably walkable access to vibrant, amenity-rich urban locations like Melrose Arch and Sandton City that include exclusive shops, restaurants, theatres, clubs, museums and galleries as well as their workplaces.
The super-wealthy often also have quite a nomadic lifestyle that includes frequent travel for business or pleasure, so in addition to top-notch building security with private elevator access to their apartments, they also require easy access to a major airport such as that provided by the Gautrain.
But that's not all. "Affluent buyers still want a home that offers them the chance to enjoy a luxurious lifestyle, so the most sought-after of the high-rise apartment towers in and around Sandton - the "Manhattan of Africa" - also offer many of the same facilities that are to be found in the superior hotels they frequent when abroad: 24-hour concierge services, in-house gyms, wellness centres and pools, business centres and places to socialise such as a pool deck and bar or an in-house coffee shop/ restaurant," says O'Hagan.
"Most have full-time, in-house building managers, and some have even expanded their offerings to include gourmet restaurants like Olives & Plates in Embassy Towers, Concierge office suites and boardrooms, in-house movie theatres, health spas, community wine cellars, child-care services, cooking classes, pet grooming services, and rock-climbing walls as well as yoga and aerobics classes. Literally everything residents need is on-property or on-demand - and as a bonus the views beyond the floor-to-ceiling glass walls of their opulent apartments are usually quite spectacular."
However, even those vistas might not be enough of a lure, were it not for the fact that affluent owners also find luxury apartment living to be very cost efficient. When one considers that the levies in Johannesburg's top luxury buildings run from R7 000 to about R20 000 a month, that stacks up well against the operational cost of running a luxury freehold home, which can easily come to R100 000 a month including rates, insurance, security, maintenance and staff salaries.
Then there's the cost of capital. For an investment of R15m to R25m, high-end buyers can enjoy the same space and level of luxury as in a freehold home that costs around R30m to R40m, while freeing up a large chunk of capital that they can invest elsewhere - or use to buy that secluded country retreat.
*Article first published in the March 2019 edition of Premier, the official guest magazine for the exclusive international and domestic Bidvest Premier airport lounges. See https://www.freemagazines.co.
Author: Meg Wilson