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Micro apartments. Macro appeal.

When the first micro-apartments (compact studios of around 20-30m²) hit the Cape Town market, reactions from the public were mixed. Jokes about the Mother City’s notorious property prices flew on social media, and even formal publications questioned the viability of luxury micro-homes in the South African market.

Meanwhile, in the background, first-time buyers and investors were flooding to the developers’ sales offices to snap up these tiny apartments.

The sheer speed of the sales was almost unprecedented. Micro-apartments at Newlands Peak in Newlands (by Rawson Developers) sold out entirely on launch day. BlackBrick Cape Town in the city’s CBD (by Ryan Joffe Properties) sold 60% of its micro-units in its first week. The Flamingo in Sea Point (by Signatura) enjoyed similar success, with only 5 of its compact studios still listed as available. 

So, what is the secret behind the appeal of these controversial, small-space properties?

“One of the biggest and most obvious attractions of micro-apartments is their relative affordability,” says Brad Morgan, Head of Marketing at Rawson Developers. “With interest rates as low as they are today, first-time buyers can get their hands on a micro-unit in a top-tier lifestyle development for a very similar monthly outlay to what they would normally pay in rent. Investors are also able to diversify their portfolios at a lower expense, often improving their overall ROI at the same time.”

What about space constraints? Surely micro-apartments have significant lifestyle challenges when compared to more traditional designs?

“Lifestyle is a major drawcard for opting into a micro-apartment home,” says Morgan. “That’s something that has become very clear internationally, where small-space living has been a trend for some time now. It’s something developers are very conscious of when conceptualising these modern developments.”

Indeed, most modern developments are designed to extend residents’ living spaces beyond their units’ confines to include many – typically very luxurious – communal areas. These can include everything from hotel-like foyers (complete with concierge) to rooftop entertainment and exercise areas, swimming pools, gyms, coffee shops, restaurants, bars, and even co-working spaces. That’s a good deal more than most homeowners and tenants can expect from even the most spacious of traditional properties.

Security, too, is often light-years ahead of older buildings. This is ideal for investors looking for a low-risk, lock-up and go lifestyle, corporate crash-pad or short-term rental property – particularly when paired with the minimal maintenance requirements of an apartment only 20-30m² in size! 

Take, for example, the latest offering from Rawson Developers. The Tokyo is a brand new development of micro-apartments, ideally located in Cape Town City Centre. While the units range from 26sqm to 51sqm, their potential is enormous. The Tokyo will boast 15 floors of luxury apartments, world-class amenities, and state of the art security. Investors will also enjoy the pretty price points, starting from just R950 000. 

Of course, there have to be some downsides to micro-apartments. One of these is that, unlike larger properties, they seldom come with a parking bay. However, this doesn’t seem to be deterring investors, many of whom are ditching car-ownership in favour of property investment and the flexibility of ride-hailing services like Uber.

Clearly, micro-apartments are a good fit for emerging lifestyle trends, but what about their investment potential?

“There isn’t a lot of long-term data on price growth for these types of properties in South Africa,” says Morgan, “but if initial investor interest and short-term growth is anything to go by, micro-apartments could be the biggest thing to hit the market in a long time.”

Love them or hate them, the undeniable success of South Africa’s first micro-apartment developments means we’ll likely be seeing far more of this trend in SA’s major cities. Just remember to act fast if you’re keen to get in on the action. These investments pack quite the punch on the popularity scale! DM/ML

Visit: w​ww.thetokyo.co.za ​or contact i​[email protected] ​for more information.

 

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