Demand for commercial and residential space in Cape Town’s central business district in 2023 created a surge of new property investments totalling an estimated R7.285bn — more than double the value of property investment in the CBD in 2022.
That is according to the State of Cape Town Central City Report 2023 — A Year in Review (SCCR), an annual publication on the economy of the Central City, published by the Cape Town Central City Improvement District (CCID). The CCID is a not-for-profit public-private partnership established in 2000 by local property owners who set a goal of lifting the CBD from increasing “crime and grime” by creating a safe, clean and caring urban environment.
The latest report released on Wednesday shows that in 2023, there were 30 property developments for the city. These include developments completed, under construction, in the planning phase or proposed. They range from commercial properties to mixed-use and residential developments. Examples are the mixed-use R600m skyscraper, The Rubik, designed to resemble a Rubik’s Cube, Neighbourgood 84 Harrington (R180m), and The Barracks, a R150m Heritage development in Bree Street.
In the view of CCID chair Rob Kane, the property development in the CBD in 2023 was “an extraordinary investment for an area of only 1.6km² in a country with a subdued economy”. He foresees it will significantly increase the economic growth and mix of the CBD.
Of the 30 property developments in 2023, 40% were residential builds, indicating that the strong demand for inner-city accommodation is ongoing.
There were five new commercial-only developments in 2023, while seven mixed-use developments also include offices. According to the report, “this increased offering, coupled with a decline in office vacancy rates, reflects a renewed interest in office space, driven by the economic recovery of the Central City and a trend towards employees returning to the workplace. It also shows how resourceful and innovative Cape Town commercial landlords have been in creating pleasing work environments for tenants in a bid to entice workers back to the office”.
The City of Cape Town recorded the lowest office vacancy rate of 7.5% among the major municipalities in the country.
As for residential property in the Central City, nine developments were completed in 2023 and six residential buildings are in the planning phase. Additionally, two mixed-use buildings were finalised, with another under construction and four in the planning or proposal phases. One of the planned mixed-use developments is Mama Shelter Africa, which will see the international hotel brand reimagine the old City Park building and redevelop it into branded residences, and office and retail space.
The researchers said the report that Cape Town was one of five African cities — with Cairo, Algiers, Rabat, and Tunis — making their mark on the global smart city stage. In the report, Cape Town property developer Jacques van Embden, CEO of Blok, said Cape Town had emerged as a pioneer in the Smart City revolution.
“At the heart of the smart city concept lies the notion of accessibility to information. By harnessing data analytics, we can gain valuable insights into various aspects of urban life, from optimising commuting patterns to improving energy efficiency... allowing us to make informed decisions that benefit both residents and the environment,” Van Embden said.
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