R3.8bn property boom for CBD

Major developments worth over R3.8 billion are planned for the Cape Town CBD.

It’s boom time in the Cape Town city centre, with multi-billion rand developments planned for the CBD – seven of them in the proposal phase and five in the planning stages.

City Central Improvement District (CCID) chair Rob Kane, said one of the most thrilling aspects for the organisation is to see development taking place in the entire footprint of the CBD – from a number of new buildings going up on the Foreshore, to the refurbishment of hotels and important public buildings such as the courts, museums and the Castle of Good Hope. “We have already seen how the re-establishment of businesses in the Bree Street corridor are transforming this entire street,” he added.

“Every cent spent on improvement means increased footfall into the central city, ever-increasing amenities for all Capetonians and visitors to enjoy, and expanded job opportunities.”

Six of the developments are being undertaken by FWJK Developments, based in Bree Street, which proves to be the biggest local property investment in the CBD at this stage.

According to Craig Armstrong of FWJK, the total cost of their developments in the city centre – proposed and under way – is R3.8 billion.

“All of these projects will commence during the next nine months, with construction of a
130-unit apartment block, The Docklands in Prestwich Street, which is a R385 million project, commencing in November.”

But the highlight for the company, he said, is the Zero2one development, on the corner of Adderley and Strand streets, which, on completion, will be the tallest building in the CBD.

The mixed use development is a proposed 42-storey building, 148 metres in height, and is set to have 624 apartments, 760 parking bays and retail space.

Mr Armstrong said the proposed Zero2one was largely driven by a marketing objective because FWJK believes many investors will be driven to own part of the tallest building in Cape Town.

“It is all about desirability, and that is why the Empire State building in New York, at a height of 443m, remains a phenomenal commercial success. Also, Zero2one Tower will offer the best 360 views of Cape Town ever seen.

“Other projects by FWJK Developments include the proposed 36-storey Goldies on Buitengracht Street; a 28-storey mixed-use development at 16 Bree Street and a mixed-use building upgrade at 4 Loop Street on behalf of Berk Property Holding that will include a residential component.”

Mr Armstrong said the demand for good affordable well-designed residential products remains unsatisfied due to the migration to the Cape Town CBD from the suburbs and from the rest of South Africa.

“Where in South Africa do you have anything like First Thursdays? People of all ages want to live in the city centre because the people who run Cape Town have made it a great place to live.”

He said the reason the company chose to propose six developments at one time is purely because of demand and lack of supply.

The Bree Street building from which Mike’s Sports operates will also undergo a revamp. The property, which is bounded by Strand, Bree and Waterkant streets, is the site of an old historic warehouse subdivided into six parts, all seperately owned.

Casey Augustides of Mike Sports said over the years, the company had purchased the variousparts and consolidated it into one property. “We have worked with the highly knowledgeable and respective heritage architects Gabriel Fagan, who are currently restoring the Castle, on restoring the existing buildings back into an integrated structure which best resembles its historic form… and a very modern new office component floating above.”

He said construction was expected to start next year. “Once completed, it will be a vastly improved site and something more of interest along Cape Town’s exciting Bree Street.”

Mr Augustides said Cape Town is undergoing massive rejuvenation and re-development, which is bringing a very positive energy to the city. “From our perspective, we are thrilled to be part of this drive, and feel proud that we have managed to find the balance between development, and heritage conservation with our project.”

He said Mike’s Sports would still maintain a dominant presence within the finished building. “Two new shops will open up onto Strand Street, facing the Tsogo Sun development, and three new shops will open up onto Waterkant Street, adding to the pedestrian experience along the fan walk.”

The Tsogo Sun development comprises of a R68 million development of SunSquare and Stay Easy Hotels, which is already under way, opposite Mike’s Sports, on the corner of Buitengracht and Bree streets.

Other development projects include the R33 million Netcare unit at Christiaan Barnard Memorial Hospital on DF Malan Street and an R832 million expansion of the Cape Town International Convention Centre, which will be completed in the next two months.

The city centre will also see a radical change in terms of hotel developments and upgrades.

The revamp of the Radisson Blu Hotel and Residences in Riebeeck Street is set to be completed before the end of the year, and the proposed The Modern, a mixed-use development with a hotel in Bree and Hans Strydom Streets, estimated at R650 million, is in its planning stages.

The Capetonian Hotel in Heerengracht will also be upgraded at an estimated cost of R200 million. Three hotels are in the pipeline – one at the Waterfront and two at Culemborg on the Foreshore, a R2 billion project being undertaken by Marriot, the worlds’ the largest hotel group, in partnership with the Amdec Group.

The construction of the first Marriott Hotel in South Africa is already under way, and is set to be completed by 2018.

The five-star Marriott Hotel, with 200 rooms, will be built on the Foreshore, as will the 150-room Residence Inn by Marriott.

At the official announcement of the Marriott project on Thursday October 6, the president of Marriott South Africa, Alex Kyriakidis, told the CapeTowner that Cape Town was one of the jewels of Africa.

“We’ve been wanting to make our mark in the city centre for a long time. We already have 70 Protea Hotels in South Africa. The Westin Hotel is part of our group as well. By extending our brand, we are giving our members and opportunity to travel the world and earn loyalty points where they can use anywhere in the world,” he said.

“It is important for the local market as well, because the three hotels will generate 1 000 jobs direct employment – for the hotels to built alone will create construction and architectural and construction jobs. Indirectly, local businesses will benefit. The economic multiplier is one and a half times what the hotel’s turnover is, because people who visit the hotels will invest in surrounding restaurants and take taxis, and so on.”

MEC for Economic Opportunities Alan Winde, said while the V&A waterfront is often cited as the most visited space in Cape Town, this year the city centre has had more visitors than the Waterfront. “The city centre is really becoming a tourist destination,” he said.

Mr Winde said that the aim was for the CBD to be not only a tourist destination, but also a business attraction, where people can come to build headquarters and operate in the city.

“If you look around, you see development all around. There are three hotels being built by Marriot International, the Tsongo group is building two hotels, and there are other major, exciting developments happening in the city centre. We are bulking up and modernising the city, and building and investing in it. “This means that we are also enabling entrepreneurs and smaller businesses, who will benefit from the investment in Cape Town. This shows that the City has got it together. Everyone is doing what they are supposed to be doing. Its exciting, we can be proud of what is happening here.”

The CEO of Wesgro, Tim Harris, added: “You can see the momentum in the Cape Town tourism economy. Hotels especially are adding thousands of rooms in the CBD. This shows strength in the Cape Town brand.”