Sol Kerzner’s R1bn swansong
It will be interesting to see the level of demand for Sol Kerzner’s latest project, a R1bn uber-exclusive housing estate to be developed on a portion of the Sun City developer’s Leeukoppie property in Hout Bay. Some may say the timing of this week’s launch of Kerzner Estate is unfortunate, given that Cape Town’s water crisis has seemingly prompted the well-heeled to put property-buying decisions on hold (Features February 1-7).
The 82-year-old Troyeville-raised chartered accountant, together with his eldest daughter Andrea, launched the development this week at the family’s Leeukoppie residence, famed for its celebrity-studded New Year’s Eve bashes.
The new eco-estate, high on the slopes of the Klein Leeukop mountain and with expansive ocean views, takes up a 10ha portion of Kerzner’s 150ha Leeukoppie property. The development will, on completion, include 48 three, four and five-bedroom homes at between 374m² and 738m² on stands of 1,500m². Prices start from R20.5m (including Vat).
Kerzner’s last project in SA was Cape Town’s One&Only hotel at the V&A Waterfront, completed in 2009. He has come out of retirement to oversee what he believes will become one of SA’s most exclusive residential addresses. "I have owned Leeukoppie since 1983, it has been our family home for many years. So this project is very close to my heart. It’s also the first development ever to carry the family name," Kerzner said in an interview with the Financial Mail.
He stressed that this is not a one-size-fits-all development. Kerzner has employed six of SA’s top architectural firms and has spent the past 12 months overseeing the planning phase to ensure each house is uniquely designed to maximise views and privacy.
He said he spent most of his time in London in recent years, his latest venture will keep him in SA for the time being. He founded Kerzner International in 1993 but is no longer involved in the business following his retirement as chairman in 2014. The company, formerly listed on the New York Stock Exchange, has built a number of upmarket hotels in the Bahamas, Dubai and China.
Kerzner was last year named SA’s top businessman of all time by New World Wealth. The survey noted Kerzner’s remarkable career isn’t necessarily due to the success of his hotels as such but rather the impact they have had on surrounding areas.
A starting price of R20.5m certainly places Kerzner Estate alongside SA’s wealthiest streets and developments, typically found in neighbouring Atlantic seaboard suburbs such as Llandudno, Bantry Bay, Camps Bay and the V&A Waterfront. For instance, the average 200m² abode in The Ridge, Cliff, Nettleton and Kloof roads demands between R15m and R20m, according to New World Wealth’s latest residential survey.
The question arises as to whether Kerzner Estate could be negatively affected by Cape Town’s municipal water supply running dry if local authorities can’t stave off Day Zero. Some Cape Town developers have reportedly already put new projects on hold given the threat that taps will be turned off, which will inevitably result in building delays and increases in holding costs.
Ross Levin, Seeff Atlantic seaboard and City Bowl developments director, who will be overseeing the marketing of Kerzner Estate, concedes that the water crisis is a concern. However, he says the development is unlikely to be affected by the drought as construction of the first house is only set to begin in six months’ time. Provision of infrastructure and services has already been completed and the property has its own borehole. Levin adds that the development will incorporate a number of "green" elements, including provision for grey and rainwater harvesting. The indigenous vegetation of the estate will also be restored.
Levin says while it is difficult to predict how quickly the estate will sell out, interest has been "overwhelming", especially from Johannesburg and international investors.
Meanwhile, industry players last week warned that a prolonged interruption of Cape Town’s water supply will have far-reaching consequences for the city’s property market.
Not only are sales volumes likely to drop, but the sales process itself could be delayed due to bylaw requirements.
Craig Guthrie, conveyancing attorney at Guthrie Colananni, says no property can be transferred to a new owner without a plumbing certificate. The latter can only be issued once an accredited plumber has tested the water system. However, water installation systems cannot be checked if the municipal water supply is turned off. Guthrie warns that disputes are also likely to arise between buyers and sellers regarding the condition of the property, particularly given potential damage caused to pools, gardens and geysers.