Over the last few years, higher interest rates and inflated property prices combined with stagnant rental returns have reduced the value proposition of property as an investment opportunity.

For many residential property owners rental returns are often as little as three to five percent of the value of the property per annum, falling far short of the current prime mortgage rate of 14 percent. Add management fees, levies, rates and taxes to the equation and it soon becomes apparent that many 'buy-to-let' properties no longer offer the best value around.

In response, a few property developers are coming up with innovative ways to improve the value proposition for property investors.

Long Street, Cape Town!

"One such solution is the guaranteed mortgage rate of prime minus five percent (to a minimum of 10.5 percent) as well as a guaranteed return of eight percent per annum for the first two years of ownership offered to buyers of apartments in Pepper Club, a new residential development situated along Long Street in Cape Town," says Louise Maranz, Principle of Vered Estates in Cape Town.

With the prime rate currently at 14 percent, Pepper Club offers an interest rate of only 10.5 percent per annum, which is vastly superior to what the majority of lending institutions are currently offering potential property buyers. At present, the best interest rate that potential buyers are likely to secure from most major financial institutions is around prime minus 1.5 percent, equating to 12.5 percent.

A short drive from everything

The Pepper Club also offers the opportunity for significant capital appreciation. This sophisticated Long Street development boasts panoramic views of the best that Cape Town has to offer. It's part of the vibrant Long Street life and a short drive away from the V&A Waterfront, cable car, world famous beaches and with easy access to transport routes to the Winelands. This development not only offers an affordable yet sophisticated physical asset for first-time investors, but also allows tenants to experience first-world exclusivity in an exciting, cosmopolitan environment.

The development, a 20-storey tower with 250 apartments, boasts all the important luxury amenities of a top hotel including a state of the art fitness centre, laundry and cleaning services, swimming pool and sun-deck, private movie theatre, 24-hour security, undercover parking and a concierge to attend to your every indulgent need. "Recent development trends have seen the conversion of old office blocks into apartment complexes. The Pepper Club is unique in that it moves away from this trend to redefine the notion of elite apartment living with the construction of a brand new high-rise with state of the art amenities and finishes to lift the standard to a level not previously seen," says Maranz.

Apartments range from studios of 34m² to luxurious penthouse suite duplexes of 400m². Prices range from R799 000 to R16.5-million with most of the more exclusive options already sold out.