At Destinata Capital, and now Destinata Equity Fund’s new Investor Share classes 2 & 3 our core focus is on Airbnb properties in the Atlantic Seaboard, Cape Town. I took a view on the industry when Covid hit in 2020 – the fundamentals of Cape Town in terms of short-letting, were just too solid to ignore (even though most investors did – which benefitted us greatly!). When the majority were selling, we were buying, and I’m so happy we did!

Let’s have a look at the industry over the last 3 years…

I love data, so let’s look at the graphs 1^st that tell you most about the industry.

Why Airbnb Properties Performed Exceptionally Well in the Atlantic Seaboard, Cape Town

The Atlantic Seaboard in Cape Town has solidified its reputation as a premier real estate investment destination, particularly for Airbnb-style short-term rentals. A combination of capital growth, international arrivals, and strong demand has fuelled exceptional performance for Airbnb properties in this area. This article explores the underlying factors and provides statistical insights into why this market is thriving.

1. Rising Demand Driven by Tourism

Cape Town remains one of South Africa’s most visited cities, and the Atlantic Seaboard is a hotspot for tourists seeking luxury, convenience, and scenic beauty. Between 2022 and 2024, international arrivals increased significantly:

• 2022: 1.5 million
• 2023: 2.1 million
• 2024: 2.5 million

This steady rise (shown in the graph) reflects a rebound from the COVID-19 pandemic and renewed interest in South Africa as a travel destination. Popular areas like Camps Bay, Clifton, and Sea Point benefit directly, as tourists prioritize proximity to beaches, vibrant nightlife, and iconic attractions. The 2 major buildings we invest in, being Docklands and 16 on Breë, fall within the Atlantic Seaboard area, being in De Waterkant.

2. Strong Occupancy Rates

The average occupancy rates of Airbnb properties in the Atlantic Seaboard have risen, as seen in the following trend:

• 2022: 65%
• 2023: 70%
• 2024: 75% (I’m happy to report that our average occupancy rate in 2024 has been 90% – the reasons are obvious, we’re better than the rest of the market!)

Such high occupancy rates demonstrate strong demand throughout the year, bolstered by a mix of international and domestic tourists. The area attracts high-value travellers who are willing to pay premium rates for short-term stays, driving up revenue for property owners.

3. Impressive Yields

With average yields increasing from 8.5% in 2022 to 9.8% in 2024, Airbnb properties in the Atlantic Seaboard offer lucrative returns. This performance stems from:

• High nightly rates: Properties in the area often command nightly rates exceeding R5,000 during peak seasons, and even much more for premium properties.
• Extended peak periods: Cape Town benefits from year-round tourism, particularly during the southern hemisphere summer and European winter.

4. Capital Growth and Long-Term Value

The Atlantic Seaboard has seen remarkable capital growth over the last 24 months. Property prices increased by approximately 30.3% (according to ChatGPT), driven by high demand and limited supply. Key contributors include:

• Exclusive inventory: The Atlantic Seaboard has a finite supply of properties, particularly luxury homes and apartments.
• Foreign investment: International buyers view the area as a secure and prestigious real estate investment.

This capital appreciation ensures that investors not only earn through rental yields but also benefit from substantial asset value growth over time.

5. A Unique Market Dynamic

Several unique factors make the Atlantic Seaboard a standout Airbnb destination:

• Luxury and exclusivity: Properties in this region often feature world-class amenities such as infinity pools, panoramic ocean views, and designer interiors.
• Convenient access: Proximity to Cape Town’s city centre, Table Mountain, and popular beaches enhances appeal.
• Flexibility in pricing: Hosts can charge premium rates during high-demand periods, optimizing revenue.

Conclusion

The Atlantic Seaboard exemplifies the best of Cape Town’s real estate market, combining high yields, robust capital growth, and unmatched appeal for international travellers. For investors seeking to capitalize on the short-term rental market, this area presents an exceptional opportunity. With proper management and strategic investment, Airbnb properties here promise sustained profitability and long-term value.

For property owners and potential investors, staying informed about trends in tourism, property regulations, and market dynamics will be crucial for maximizing returns in this iconic region.

It’s a bustling industry, so don’t miss out. So, you’re probably asking “how do I take part?”. You’ve got options:

1. Purchase property outright in the area – we can offer a plug & play solution, as we’ve got shares in a short-let management company, who can offer a turnkey solution, from furnishing and staging all the way through to day-to-day management and maintenance. You just check your statement every month.
2. Consider investing in DEF (Destinata Equity Fund), our Airbnb-focused fund. Also called the “armchair” option.

What do you need to do? Contact [email protected] with subject line “I want in on Airbnb in CPT” and you’ll be directed to the correct channel.

Regards,<br/ >Johannes Maree

P.S. For any service related matters, questions, queries or complaints regarding Wealth Masters Club, Destinata or Treasury Trust Services, please contact our service department on [email protected]