Tuscan Park Villas, Cape Town

Investment Opportunity

Tuscan Park Villas

1. PERFECT LOCATION
• In Tyger Valley Cape Town north of the National Road towards Durbanville. On the corner of Old Oak Road and Twist Street
• The development site is located on a hillside with spectacular views all round including Table Mountain.
• Located in an area experiencing a tremendous growth rate in new residential and business development. More and more businesses are expected to move their offices to the Tyger Valley area as it is so centrally positioned
• Close to the highly successful Tyger Valley Shopping Centre. Another convenience shopping centre, Willowbridge, is being developed directly next to the Tyger Valley Shopping Centre. Also close to the trendy High Street Shopping Village, schools, medical care facilities and easy access to the highways
• Research showed that residential property in the vicinity of a major and well-known shopping center provides investors with excellent value and growth. Research done in the area around Tyger Valley indicated that the area represents the same level of potential wealth as in the case of the Sandton property price increases
• Very centrally located. Close to the surrounding countryside, Cape Town, Stellenbosch, Paarl, the airport and all the well known beaches.
2. BENEFITS OFFERED TO INVESTORS
• Two bedroom apartments with open plan kitchen and living area (66 sq meters). The exact size must still be confirmed. All the apartments have a balcony
• One full bathroom
• Quality finishes (Granite tops etc)
• One secure basement parking area is included in the purchase price
• Spectacular views are offered
• Completion and transfer date only in one year’s time. Free capital growth will be obtained on the full purchase price for one year
• Deposit of only R 20,000 (2,2%) is required
• There are no transfer duty, conveyance costs or bond registration costs payable.
• Purchase prices for most of the units are R 899,900. The attached document sets out a market comparison to similar units being sold in the Tyger Valley area. A cash flow projection is also included in the document assuming the investor decides to sell their unit after two years. Based on this very pessimistic projection, a profit of R 100,103 is possible. This translates to a 263% investment growth on the total capital layout required by the investor.
• Rental guarantee of R 4,000 per month is offered for one year from date of registration of the property. In addition the investor can generate further rental income by placing their own tenant in the apartment. Assuming a very conservative rental income of R 3,500 per month in one years time, a total rental income of R 7,500 per month is secured for one year after the date of transfer. Based on a bond rate of say 9,5% (prime minus 1%) and the purchase price less the deposit, the bond repayment will amount to R 8,201 per month. If one assumes an estimated levy of R 800 per month, one has a minimal cash outflow of R 1,501 per month (R 8,201 plus R 800 less R 7,500) in year two.
• Free capital growth is therefore presented to investors at minimal risk over two years
3. PROPERTY MARKET INDICATORS FOR THE FUTURE

The following opinions are being expressed by property specialists regarding the recent reduction in the interest rates and the prime bond rate to 10,5 %:

1. Reduced bond costs
2. Downward pressure on rental income
3. Property will become more affordable resulting in a greater number of people entering the property market. This will result in higher prices
4. The rand could weaken resulting in job creation in the mining industry and jobs dependent on exports. This should sustain the demand for residential property
4. The upgrading of the infrastructure in the Western Cape to accommodate the Soccer World Cup will place upward pressure on property prices. Research worldwide has confirmed this
5. There is a continued strong demand from international investors for good property investments in South Africa. Our property offers them an excellent lifestyle and world-class property at very reasonable prices. Our property prices are still very cheap compared to international property prices
6. No sharp increases in the interest rates are expected over the next few years. This will continue to support the property market
7. A very positive outlook by investors regarding the future of South Africa. This will continue to support the property market. The purchase of ABSA by BARCLAYS is a very clear indication of the international investors confidence in South Africa
8. ABSA predicts a nominal year-on- year growth in the average house prices of 20 % for 2005. The growth figures for last year clearly indicated that residential units in security complexes perform far better than the average house price increase per annum
9. The decrease in the availability of suitable development land close to central business areas is placing upward pressure on housing prices
10. Good economic growth rates are expected for the future
11. Certain property specialists are predicting a reasonable strong growing property market for at least the next five to seven years in South Africa. It is a question of supply and demand