Seeff Fractional offers two week’s holiday a year in perpetuity in a one bedroom apartment at the Victoria & Alfred Waterfront from R297 000.
Certain sectors of the property market experienced a slowdown in growth and sales over the past two years, but Henry Greyling, chief executive of Seeff Fractional Ownership International says during that period his division did 116 re-sales of existing shares at an average year-on year growth of 22.4%.
“I don’t think many property industries in the world can boast this rate of return. Only four of these 116 resales were sold at less than 15% year-on-year growth – this during a recession – which provides huge credibility for the fractional industry and its sustainability as a superior property and leisure investment.”
Greyling says over 60% of Seeff’s resales in the V&A Waterfront, Zebula in Limpopo and Zimbali in KwaZulu-Natal achieved a year-on-year growth of over 64%.
“Our first sales in Zebula were at R265 000, and we now sell them easily for R460 000 - 480,000. Initial sales in the V&A Waterfront were at R441 000, and they are now selling for R796 000 just one year later. Also remember that virtually every one of these resales were distressed sellers due to the global meltdown, and needed us to resell their shares quickly.”
The prices quoted are for four weeks stay every year in perpetuity.
An interesting point is that though he recently still had a further 59 mandates from investors who wanted to sell their shares, during the last three months 52 of those have cancelled their mandates.
“They don’t want to resell anymore – which I view as a clear indication that the recession is nearing its end. Investors would now prefer to hold onto the shares.”
He says that total sales have been growing at around 18 - 22% since February this year.
“Coming off a low base from the recession, that is not great – but it is improving every day. Our biggest challenge remains education of the public, as virtually everyone I personally encounter is still amazed that this product with all its phenomenal advantages actually exists, and there is also a lack of understanding that an investor actually owns the bricks and mortar.
“The most popular places to buy fractional properties are Zimbali and Zebula (due to their relative proximity to Gauteng, as 75% of our buyers are Gautengers) and the V&A Waterfront. Sparrebosch and Pinnacle Point on the Garden Route are in second place. However, Horizon Bay apartments in Table View and Langebaan Golf Estate outsold the above estates during the recession, largely due to their lower prices at R159 000 and R99 000 (for two weeks every year) respectively.”
Greyling says end-user finance remains a challenge and will do so for a while. However, Seeff still offers 50% finance on 80% of its products. Rentals of investors’ unused weeks is growing rapidly, and assists them in mitigating their low shared levies.