SUNDAY TIMES - Porsche, Prada and plush property: SA's ultra rich living the high life
Sunday Times News By SUTHENTIRA GOVENDER, 2016-02-14 00:03:00.0

Porsche, Prada and plush property: SA's ultra rich living the high life

One of South Africa’s richest citizens, Patrice Motsepe, with rapper 50 Cent, in a photo from 2008

As South Africa hurtles towards junk status, the country's ultra-rich are getting richer, broadening the wealth gap as the Gucci brigade sidestep the economic storm.

A report by Sandton-based wealth intelligence company New World Wealth revealed this week that the number of ultra-rich individuals in South Africa - those with net assets of $30-million (about R475-million) or more - rose 18% from 526 in 2007 to 620 in 2015.

These 620 South Africans collectively are worth about R294 billion. In comparison, the country's 2015 education budget was R256.7-billion

The super-wealthy remain largely unaffected by turbulent times, continuing to splurge on fine art, wines, supercars, rare game, second homes and expensive watches, often in the name of "investment".

EFF leader Julius Malema and his band of men and women in red might choke on the fact that rich South Africans held $556-billion in wealth at the end of last year.

The report said the "superior performance" of ultra-high net worth individuals was indicative of their resilience to tough economic conditions.

It demonstrated a growing wealth gap in South Africa at the top end of the wealth pyramid with "ultra-high net worth individuals getting richer and the average millionaire getting poorer".

Andrew Amoils, head of research at New World Wealth, said South Africa's ultra wealthy generally held their assets offshore, were involved in multiple businesses and had political connections.

The majority of South Africans polled in January said they would vote for the ANC with Cyril Ramaphosa as president. Only 8% favoured the DA under Mmusi Maimane while 7% supported the "Zupta Must Fall" party.

Overall the report found that the number of dollar millionaires in South Africa dropped from 42,800 in 2007 to 38,500 last year.

Amoils said the "average millionaire" - lower down in the wealth tier - had most of their assets in local property and equities and usually did not have political ties.

Jeremy Nel of Luxury Brands, a high-end marketing agency, said: "Real millionaires live a standard of life and aren't prepared to compromise. Yes, the 2008 crisis has eroded the marginal millionaires, but the true millionaires persist."


The number of rich white South Africans dropped from 36,600 in 2007 to 21200 last year, mainly due to emigration.

Over that period the number of rich black people, Indians and coloureds increased dramatically from 6,200 to 17,300.

Johannesburg is home to the most South African multimillionaires (970), followed by Cape Town with 360 and Durban with 120.

Johannesburg tycoon Vivien Natasen, who owns a string of lucrative businesses, properties and supercars, said he now thinks twice before splurging on luxury goods like Louis Vuitton due to the economic climate.

Natasen, the CEO of Neo Africa and publisher of Prestige Magazine, said belt-tightening measures included a moratorium on his executives flying business class.

"South Africans have an inner litmus test of value for money and generally, no matter how much money one has, there is always that value for money consideration in spending," he said.

When it comes to choosing a place to live, the super-rich have a soft spot for luxury estates. Zimbali in KwaZulu-Natal boasts the highest number, with 30 multimillionaires on the estate, while Erinvale near Somerset West, has 20 and Blair Atholl, north of Johannesburg, has 10.

Top estates for super-rich second homes include Fancourt, Zimbali, Pezula and Val de Vie.

Andrew Golding, CEO of the Pam Golding Property group, said there had been a sharp increase in sales of top-end residential properties in the Western Cape, Garden Route and the North Coast of KwaZulu-Natal in the past four months.

"We attribute this increase to a number of trends, including migration of high net worth buyers from the north of the country to coastal areas; the investment market also investing in these areas; and a small increase in foreign buyers both from Africa and other continents," he said.

"Furthermore, what we are seeing is at the very top end of the market - the ultra-high net worth category, over R30-million and up to R100-million - that increasingly these properties are being priced as if they were in a hard currency," Golding said.

"Sellers are evaluating their properties by comparing them in world terms, for example London or St Tropez."

Wealthy's shopping directory: It's not 'high-end' till the bank balance sings

From flashy supercars to designer outfits and plush hotels, South Africa has emerged as sub-Saharan Africa's main luxury hub.

Last year, the country generated luxury sales of about $2.4-billion (about R38-billion), including cars, clothing, watches and jewellery as well as visits to top-end hotels.

According to the New World Wealth report, Porsche sold 112 cars in December last year, while nine Maseratis were sold and six Ferraris.

The top-rated clothing and accessory brands for men last year were Zegna, Paul Smith, Hugo Boss, Dunhill and Canali.

Women are splurging on Louis Vuitton, Gucci, Prada, Dolce&Gabbana and Burberry .

With the demand for luxury goods, the report stated that Chanel, Christian Dior, Christian Louboutin and Hermès were likely to open stores in South Africa within the next 10 years.

Already Prada, Jimmy Choo, and Zegna have claimed space at Sandton City's new luxury section, the Diamond Walk.

When it comes to luxury hotels, South Africa hosted about 11,000 multimillionaires - the highest in Africa. Morocco was second with 4000, the report said.

"Major destinations included Cape Town, Johannesburg, Umhlanga, Franschhoek and Kruger Park."

Luxury Brands' Jeremy Nel said the super-wealthy loved their high-end brands, which offered "absolute quality, [were] desirable, [were] not readily available, have a high barrier to entry pricing structure and, in most cases, celebrity endorsement. These brands communicate a thorough message of prestige and for those who can afford them, a desired status."

Luxury goods company Financiere Richemont SA is behind this Patrimony Traditionnelle world time watch, which costs about $40 000 Image: GETTY IMAGES

When it comes to collectables, the wealthy are investing in rare wild animals like roan antelope and sable antelope that sell for over $20,000.

Super-luxury men's watches is also a fast-growing collectable segment. The report said that "$32-million was generated in South African sales of super-luxury watches".

Major players include Patek Philippe, Franck Muller, Breguet and Vacheron Constantin.

Top 10 SA-born wealth wizards 

South Africa boasts seven billionaires, with African Rainbow Minerals' Patrice Motsepe being the only black billionaire in the country.

Local billionaires 2015

Nicky Oppenheimer - De Beers

Christo Wiese - Shoprite

Johann Rupert - Richemont

Koos Bekker - Naspers/DStv

Stephen Saad - Aspen

Patrice Motsepe - African Rainbow Minerals

Jannie Mouton - PSG

Billionaire entrepreneur Elon Musk with a Tesla Motors Model X electric SUV. Born in Gauteng, Musk now lives in the US Image: REUTERS

Billionaires abroad 2015

Elon Musk - PayPal, Tesla Motors, SpaceX

Nathan Kirsh - Jetro

Ivan Glasenberg - Glencore

- Source: New World Wealth