The former encompasses everything you would expect from South Africa’s main financial hub – striking high rise office blocks, a diverse population and a bustling business atmosphere.
Meanwhile, some 868 miles to the south of Johannesburg is Cape Town, which offers some of the most spectacular scenery in the world and a vibe akin to Nice or St Tropez.
The city was named the best place in the world to visit by the New York Times in 2014 and it is not hard to see why.
In this, the final instalment of my South African journey I will be looking at what opportunities the two cities present for high net worth property investors.
Cape Town’s Atlantic Seaboard is known locally as ‘Millionaire’s Mile’ and is home to some of the country’s most sought-after properties.
It has attracted strong inward migration from other parts of South Africa due to the quality of life it can offer.
The luxury residential market in Cape Town saw property prices increase by 19.9% between December 2016 to December 2017, according to Knight Frank’s 2018 Wealth Report.
This was due in part to the lack of supply and development opportunities in the area.
Johannesburg’s luxury residential market however saw a 0.1% decrease during the same period.
Nevertheless, the average asking price for a four-bedroom property in the prestigious Sandhurst suburb of Johannesburg still commands around R 20,000,000 (£1,109,180), while those looking to buy in the suburb of Clifton in the Atlantic Seaboard can expect to pay around R 51,000,000 (£2,816,633) for a similar property.
Both cities also offer investors some attractive rents and yields.
Those looking to invest in Johannesburg can expect to see yields of 9% for industrial space, 8% for retail and 8.5% for office space, according to Knight Frank’s Africa Report 2017/18.
Similarly, Cape Town enjoys yields of 9% for office and industrial space and 7.75% for retail space.
South Africa has had some much publicised economic and political woes over the past decade but the country has not lost its appeal to high net worth individuals.
Knight Frank’s Wealth Report explains that while wealthy South Africans are likely to continue moving money abroad and acquiring dual citizenship, the majority aren’t relocating overseas but are remaining in the country.
There were 500 individuals with wealth of US$50m plus in 2017 and this is predicted to reach 600 by 2020, according to the report.
Those with a smaller but still substantial wealth of US$5m plus are also on the rise and expected to reach 12,430 by 2020, up from 10,350 in 2017.
We see a lot of interest from South African residents looking to diversify their asset base into the UK, particularly London.
Meanwhile UK residents looking to buy in South Africa can utilise their existing asset base in the UK and leverage it in order for them to buy a property abroad, which can prove to be cost effective.
South Africa, especially Johannesburg, has a growing financial and tech community and for young entrepreneurs in the UK and Europe, the country can offer a vibrant lifestyle and in the main, cheaper property prices than here in the UK.
Cape Town’s property market has much in common with London.
Despite what headwinds the market faces, as an asset class, it will continue to hold its appeal to high net worth clients.