11 April 2013
South Africa’s Western Cape boutique hotels and guesthouses have seen a surge in investment by overseas buyers, according to Pam Golding Lodges and Guesthouses (PGLAG).
The outlook for investment in tourism locations in the province is positive as statistics show that South Africa enjoyed a 10.4% increase in foreign visitors from January to October 2012 compared to the same period in 2011, said Peter Bruil, the managing director of PGLAG, a subsidiary of Pam Golding Hospitality.
“Market activity in the guesthouse and boutique hotel market indicates growing interest in this region,” Bruil said in a statement on Tuesday.
An increase in international and local visitors, together with increased sales by PGLAG, culminated in a good 2012 for the Western Cape’s property market. The sale of two 4-star guesthouses in Somerset West and Hermanus further improved the outlook.
“The combined value of these two sales is close to R17-million,” he said.
‘Vote of confidence in South Africa’
“It is notable that the purchasers of these prime-located establishments are overseas investors who already a presence in South Africa.”
Albourne Guesthouse in Somerset West was bought by Korevest Leisure Management Group, a specialist investment company focusing on small and medium-sized businesses in emerging markets, while Whale Rock Cottage in Hermanus was purchased by Dave and Anouk Bakker.
A former national cricket captain for Holland, Dave Bakker visited South Africa and fell in love with the country. He and wife Anouk purchased WedgeView Country House & Spa in Stellenbosch and acquired Whale Rock Cottage to expand their business.
Korevest was founded by Dutch-born Tin Korver, who relocated to South Africa 18 years ago and is now based in Cape Town.
The two guesthouses have been operating for over 20 years.
“They both cater predominantly for the overseas tourist in high season, servicing mainly markets from the UK, Germany and the Benelux countries (Belgium, The Netherlands and Luxembourg), while in low season they attract mostly South African corporate travellers,” Bruil said.
He said both buyers invested additional capital, which is a vote of confidence in the country as a desirable investment destination.
“In addition to the healthy growth in revenue during 2012, confidence has been boosted by the rand exchange rate, which makes South Africa some 20% more affordable as a tourist destination than a year ago,” Bruil said.
“We are currently in an advanced stage of negotiation with a number of overseas buyers, including clients from Korea, Thailand, Germany, Switzerland, The Netherlands and England, and have a selected number of quality investment opportunities available.”