FNB has secured a R1bn funding agreement for a new luxury mixed-use development in Cape Town in a move that points to continued institutional confidence in the city’s high-end property market.
The funding will support The Paradigm, a development set to deliver 240 premium residential units at 100 Buitengracht Street, aimed at meeting sustained demand for centrally located, lifestyle-orientated urban living.
The deal highlights Cape Town’s divergence from broader national property trends, with the city continuing to attract investment on the back of semigration, constrained prime stock and sustained demand from affluent buyers.
Cape Town’s total property returns are widening their lead over other metros, with rental growth running at more than double that of Johannesburg and vacancy rates declining for a third consecutive year, according to the latest MSCI real estate index.
FNB Commercial Property Finance CEO Preggie Pillay said the bank’s participation reflected confidence in both the development and the underlying market fundamentals, noting that Cape Town continued to stand out as one of South Africa’s most compelling property markets and that the project aligned with evolving buyer expectations.
Construction began in November 2024, with Vantage Property leading the build in partnership with Tiber Construction. The project has been designed by dhk Architects in collaboration with Fabian Architects and is scheduled for completion in the third quarter of 2027.
City centre
The Paradigm will incorporate residential, retail and lifestyle elements. Vantage Property director José Rodrigues noted that securing funding at this scale came at a time of more selective financing conditions and pointed to the strength of the development and continued confidence in Cape Town’s city centre.
Although residential returns softened in 2025 as capital growth slowed, shifting performance reliance towards income, the SA Property Owners Association noted in its property trends report that income has become the primary driver of returns. Against this backdrop, demand for residential space in Cape Town remains firm and continues to underpin the market.
Business Day earlier this year reported that Cape Town’s luxury waterfront apartments are recording strong demand and high-value sales, with the Atlantic Seaboard and City Bowl cementing their position among South Africa’s leading luxury property markets amid sustained interest from local and international buyers.
The high-end residential market is gathering momentum, with billions of rand flowing into sectional title apartments as demand from semigrants and international buyers continues to outstrip supply in prime coastal areas.
Data from Seeff Property Group shows that sectional title units — predominantly apartments — accounted for about 76% of all sales across the Atlantic Seaboard and City Bowl since early 2024, generating R6.1bn last year and a further R1.5bn so far this year.
Properties are selling at an accelerated pace, highlighting the intensity of demand. More than half of Atlantic Seaboard sales (55%) were concluded within a month, while 71% of City Bowl transactions were finalised in the same timeframe — with some deals closing within days.
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