New property investment worth R5.7bn was recorded in the Cape Town central city last year despite the tight economy caused by the pandemic.
This was one of the highlights of the latest edition of the State of Cape Town Central City Report 2021 – A Year in Review (SCCR), published by the Cape Town Central City Improvement District (CCID).
The 10th edition of the report was presented to the business community at a breakfast held at the Cape Town International Convention Centre (CTICC) last Wednesday, September 14.
A total of 28 property developments were recorded last year, including 13 completed developments or redevelopments worth R2.5bn, 12 projects that were under construction worth R1.7bn and three projects in the planning phase worth in excess of R1.5bn.
Of the 13 completed developments, five were hotels or aparthotels, which have already opened. These include The Rockefeller at the Foreshore, Hotel Sky in Lower Long Street, BlackBrick Cape Town in St George’s Mall, The Capital 15 on Orange and the Old Bank Hotel.
At the meeting, CCID chairperson Rob Kane said the city was slowly going back to what it was before the pandemic started two and a half years ago, with events coming to the city, more tourists visiting and everyone getting ready to go back to work.
He said the city centre and the CCID have survived many hardships, including the Day Zero water crisis, taxi violence, strikes, and the latest, the Covid-19 pandemic, and the fact that the CBD was still going, spoke to its resilience.
This, he said, was due to closer working relationships with stakeholders, landlords and tenants during the pandemic, as well as a determination to make the Cape Town CBD a first-class business node.
“The resounding message emanating from this report on the CBD’s economic performance in 2021 remains positive: the Cape Town inner city once again proved itself resilient in the face of economic hardship and uncertainty caused by the pandemic.”
Mayor Geordin Hill-Lewis, who also attended the event, said the City of Cape Town was committed to seeing the CBD thrive, and while there were many examples of cities which lost their CBDs, Cape Town was still going strong. “In the last 10 years, the city has gone through many things. Yet as the report reflects, the city has remained resilient.”
He said the report revealed a substantial recovery of the inner city economy after the devastation of the Covid-19 lockdown, as well as the high levels of business confidence amongst inner city business owners, which steadily increased throughout 2021 into 2022.
He said the City had also invested in the CBD by recently appointing 100 dedicated law enforcement officers, as well as the Epic Centre – an information sharing centre, which houses all the security departments including Traffic, Law Enforcement, Metro police, the CCID, and SAPS.
He said the City had also launched their spring-clean campaign, aimed at getting Capetonians to take responsibility for cleaning their communities, and also to put the heat on continuous offenders who litter and dump illegally.
“We are about making this place an easier one to invest in. We want to measure ourselves by global standards as one of the best cities to do business in.”
He said the City was also expanding their Safe Spaces to better deal with homelessness and offering them assistance.
Meanwhile, Mr Kane said the myriad residential and mixed-use properties coming onto the CBD property market indicate that developers are confident there is a market for buyers.
Among other key findings in the report, presented by research economist Sandra Gordon, were that:
⦁ The retail sector – which makes up 1 163 of the 2 981 entities doing business in the CBD – remained stable in 2021, despite lagging economic conditions. A total of 81 new stores opened in the CBD last year, with 44 closing down, resulting in an overall increase of 37 retail entities.
⦁ Retail confidence in the CBD rebounded in the final months of 2021, and has continued in 2022, with the majority of retailers surveyed in the CCID’s quarterly Business Confidence Index indicating they were “satisfied” with current business conditions.
⦁ The total volume of retail space in the Cape Town CBD at end of 2021 amounted to 271 040 m². This is a 0.3% increase on 2020 following the completion of new developments.
⦁ The total vacancy rate of retail space in the Cape Town CBD – 26 747 m² – amounted to 9.9% of the total retail space available. This is less than the vacancy rate in 2020, which was 11.5%.
Harbour Arch, the R16 billion development on the Foreshore in the Cape Town CBD falls just outside the CCID’s geographical footprint and is therefore excluded from the total value of new property investment in the inner city during 2021.