Investment boom

Roggebaai at the Foreshore is set to benefit from billion-rand developments.

Roggebaai at the Foreshore is becoming Cape Town’s newest business and tourism precinct, says AMDEC CEO James Wilson.

The precinct is now home to Africa’s first AC by Marriott International Hotel as well as The Yacht Club – residential and commercial space overlooking the canal.

“Urban precincts like The Yacht Club and Harbour Arch typify a growing worldwide trend evident in the likes of Canary Wharf in London, Hudson Yards in New York, and Darling Harbour in Sydney, said Mr Wilson at the launch of the city’s latest mixed-use precinct on Tuesday April 16.

The Yacht Club, valued at R1.5 billion, comprises of two apartment blocks, separated by a corridor of open space.

The west block has 120 apartments and the AC Hotel by Marriott, while the east block houses 50 apartments set above two floors of office space. The residential occupancy was sold out well before The Yacht Club opened its doors (“Residential property boom in CBD”, February 23, 2017).

Mr Wilson said they have experienced a huge contingent of investors, as well as first-time buyers, opting to invest in the mixed-use developments, where it’s possible to live, work and play in the same location.

“One of our main objectives with this transformative project was to deliver a world-class lifestyle that also offered investors an excellent return on their investment. It was therefore extremely rewarding for us to note that apartments that launched at R48 000 per m2 in 2015 had escalated in value to R75 000 per m2 by 2018, representing an impressive 50% return on costs.”

AC by Marriott, comprising of 188 rooms, opened its doors in December last year. Of the hotel, president and managing director for the Middle East and Africa Marriott International, Alex Kyriakidis, said AC by Marriott marks the third collaboration with AMDEC and four more to come, including the next huge development, Harbour Arch. “South Africa is an important market, and Cape Town is pivotal to the growth of tourism in South Africa.

“As more and more people discover the food, growth, natural beauty and the weather, we will see more people coming to Cape Town soon and to date, we had thousands of people discover Cape Town through this hotel.” “We are delighted to open our very first AC Hotel by Marriott in the Middle East and Africa in Cape Town, further strengthening our long-standing partnership with the AMDEC Group,” said Mr Kyriakidis.

Antonie Jordaan, the investment manager at AMDEC, said the new developments will change the face of Roggebaai. “This is like a destination office at The Yacht Club. Although there are lots of spaces going up around the city, this is where people want to be.”

The MEC for Economic Opportunities, Beverley Schafer, said the Provincial government’s focus has been on creating jobs and growing the economy. “We are supposed to create an enabling environment for the private sector to invest. This developments show that we have done something right.”

She said mixed-use developments like The Yacht Club are the future of our cities – allowing people to live, work and socialise in close proximity to the city.

“As we build our province’s reputation as a global finance and tech hub, the availability of this kind of space acts as a drawcard for businesses and investors alike.”

According to the City Central Improvement District (CCID), Cape Town’s CBD has become a magnet for hotel developers with the Foreshore precinct set to benefit from billion-rand developments, indicating that investor confidence is on the rebound in spite of the tight economy.

Several new hotel developments are on the cards in the Foreshore, including a new five-star hotel set to go up on Walter Sisulu Avenue, opposite the Cape Town International Convention Centre (CTICC) following the sale of housing company Communicare’s five-storey building at Roggebaai Square.

The building was bought by an international buyer for R120 million.

More information about the development remains to be released as the owners declined to be named at this stage.

Tsogo Sun is also planning to build a new hotel on the vacant land in front of Southern Sun The Cullinan, adjacent to the CTICC.

At the launch, Mr Wilson said the construction of Harbour Arch, which will arguably be the biggest development on the Foreshore, will start in the next month or two (“Mixed reaction to R10bn complex”, CapeTowner, October 26, 2017).

The R10 billion development, once complete, will comprise six towers above a pedestrian walkway which will run throughout the precinct. Called Central Park and situated on the eighth floor; the interlinked podium level will be tenanted by restaurants, coffee shops, cocktail bars, gyms, as well as retail and lifestyle outlets.

There will also be street level motor dealerships, retail, boutique office space, upmarket residential apartments, and two Marriott branded hotels.

The initial development phase will comprise 432 apartments, two motor dealerships, retail, leisure, and commercial office space. In addition to a residents-only pool, exercise area, and terrace all located on the 17th floor, the building will also feature a roof garden and viewing deck on the 24th floor; fibre to the home, waste recycling, water-saving facilities and rainwater harvesting; a centralised district cooling plant; low-energy LED lighting and extensive parking.

Rob Kane, chairman of the CCID, said recent global reports had put the city “at the top of the pile” in terms of tourism and business tourism.

“It is encouraging that hoteliers, many of whom are international, are responding to this trend and focusing on the CBD because it is not only a destination in itself – with its beautiful architecture, vibrant street life and heritage – but an ideal central location from which to explore other parts of the city, the Winelands and parts of the Western Cape.”

Cape Town Tourism CEO, Enver Duminy, said tourism has grown significantly in Cape Town, in particular in the years since the Soccer World Cup in 2010. Although the drought significantly impacted the tourism industry in 2018, total arrivals were still marginally up year-on-year.

He said Cape Town has expanded its tourism facilities fairly significantly in recent years, with the construction of new hotels, the expansion of the CTICC and other conference centres. “In addition, the largest market for Airbnb in the country is in Cape Town, and travellers are likely to find an Airbnb property in any part of the city or the outlying areas that they would like to stay in.”

Mr Duminy said new areas of the city are constantly being opened up for tourism. “Since the Roggebaai area already incorporates the V&A Waterfront, it is established as a tourist area. New hotels have been opened in the precinct in recent years, and the Battery Park area is also a new destination for tourists visiting the Roggebaai area.”

He said Cape Town remains an attractive location for investors in the hospitality sector. “With the city having become a bucket-list destination for travellers the world over, and winning numerous international tourism awards, there are opportunities for greater hotel occupancy numbers in the years ahead.

“The city is also drawing more tourists from non-traditional source markets, such as from India, China and the Middle East, and so the likelihood is that tourism numbers will increase for this reason too. In addition, new direct flight routes, such as the United Airlines announcement this week of a new route from the USA to Cape Town, will mean greater tourist numbers for the city.”

Mr Kane said the new developments add a “vitality” to the CBD “and pay tribute to the many years of hard work by the CCID, the City and its partners”.