Tower branches into residential

LISTED property fund Tower is making its first foray into residential property through the development of a residential node at a cost of about R80 million within the Cape Quarter precinct in Cape Town.

Marc Edwards, the chief executive of Tower, said yesterday the De Waterkant development, situated at 32 Napier Street in Cape Town’s central business district, would comprise five storeys with retail on the ground floor, offices on the second level and 11 residential apartments, including a single penthouse, on the remaining three levels. Edwards said the 773m2 building on the site would be demolished to allow Tower to realise the full value of the property and utilise the full bulk capacity of 2 092m2.. He said the disproportionate cost of the building resulted from three levels of underground parking being added below the building and stretching down Napier Street. “This will add 132 new parking bays to an area that is sorely lacking in this valuable commodity.

“We cannot keep up with the demand for parking from buildings within the area. These new parking bays will generate almost 24-hour revenue as they will also be in demand at night due to their location to the stadium for people attending concerts and other evening events,” Edwards said.

Edwards said the existing building on the site would be demolished on November 1 with construction of the development immediately afterwards and the project completed about 12 months later.

“Potential investors have already approached us to reserve apartments despite the fact the development has only just been made public. There is no intention of putting residential space into the Cape Quarter Square, the main Cape Quarter property. However, we have identified opportunities for further residential development in the precinct,” he said.

Several other listed property funds have recently started focusing more on residential property.

Octodec has always had a strong residential property focus and Indluplace Properties, previously the residential property division of Arrowhead, became the first residential-focused real estate investment trust listed on the JSE when it was listed last month.

Tower Property shares on the JSE closed unchanged yesterday at R9.97.