Property investment boom in city centre

The city centre saw more than R4.4 billion in property investment from 2012 to 2016, and there’s even more than that coming down the pipe, according to a report by the Cape Town Central City Improvement District (CCID).

The annual State of the City report, was released last week, Thursday, April 20.

Now in its fifth year, the report reviews the economic health of the CBD over the previous year.

This is the first time it has looked back over a five-year period, and, according to CCID spokeswoman Carola Colbitz, the scale of investment in the city centre since 2012 is very healthy.

“We are very pleased to see the level of confidence that investors across the board have in the city centre, whether it was residential or commercial, and what is good to see is that all sectors are thriving,” she said.

The report notes the following developments in the city:

In 2012, the Newspaper House upgrade in St George’s Mall.

In 2013, the completion of Grand Parade Investments at 33 Heerengracht Street; the Artscape upgrade, phase 1; the Atlantic Centre upgrade in Christian Barnaard Street; the Civic Centre upgrade and the commercial block at 22 Bree Street; 107 Bree Street, 177 Bree Street and the Centre for the Book upgrade.

In 2014, the completion of Portside, Roggebaai Place and the Southern Sun Waterfront upgrade; parking as an addition to Atlantic Centre and the Artscape upgrade, phase 2.

In 2015, the Media24 upgrade; the Standard Bank Towers; the Thomas Patullo redevelopment in Jan Smuts Street; the completion of Touchstone House in Bree Street and the provincial government building upgrade.

In 2016, the new Netcare Christiaan Barnard Memorial Hospital and the Wesbank House refurbishment.

All of these investments, the report noted, amounted to some R4.486 billion, with an additional R7.426 billion either in planning or in the proposal development phase.

Some big-ticket projects in the pipe, include: 16 on Bree; the Zero-2-One Tower, on the corner of Adderley and Strand streets; the Capetonian Hotel upgrade at Pier Place; the Mike’s Sports redevelopment; 60 Queen Victoria Street; the Cape Town Station development; and Speakers’ Corner on Church Square.

CCID chairman Rob Kane said property values in the heart of the city had surged in recent years, and while that trend had made it “difficult for private developers to construct affordable housing” the right public-private partnership “could very successfully enable this to finally occur”.

The report shows that there has been a significant rise in the number of residential units sold, up from 185 in 2015 to 228
last year, and Ms Colbitz believes it was largely the 2010 World Cup that fuelled this demand for city living.

“During the World Cup in 2010, a large part of it played out in the city and saw many Capetonians return to the city and discover the space it had become – much cleaner and more secure,” she said.

It is that demand for residential property that has led to the development of 16 Bree Street, which will be the tallest residential building in the city centre once it’s complete.

Other residential and mixed-use developments under construction include the 4 Loop upgrade; the Radisson Blu Hotel and Residence in Riebeeck Street; the CTICC expansion; The Sentinel in Leeuwen Street and Urban on Bree.

“I think a lot of Capetonians rediscovered the city and then started to buy into that.

“They were basically trying to discover if the city was a space they wanted to live in, and it was,” said Ms Colbitz.

The commercial component has also grown substantially.
“It has taken a while for people to invest.

“Two years ago, there was a lot of premium-grade property on the market and we were concerned about that.

“But now, the vacancies have dropped from 25 percent to 15 percent,” explained Ms Colbitz.