Property investment in Cape Town’s CBD exceeded R3.5 billion in 2022, representing major growth across various sectors of the City.
Also read: Cape Town property value outperforms the rest of South Africa
The latest edition of the State of Cape Town Central City Report 2022 – A Year in Review (SCCR) featured 22 property developments or redevelopments that were recorded last year. Of these, four worth in excess of R170 million were completed, 12 worth more than R3 billion were under construction, five worth in excess of R300 million were in the planning phase and one project was proposed.
According to Businesstech, eight of the 22 projects were residential buildings, which are set to add thousands of new units to the City’s competitive property market and indicate a strong demand for residential property. Six projects were commercial properties, four were mixed-use, two were retail buildings and one was a parastatal.
Rob Kane, the Cape Town Central City Improvement District (CCID) chair, says the results of the report indicate a clear path for the City moving past COVID-19 and that it is experiencing growth and stability.
‘With the construction sector regaining its pre-Covid momentum, and the total value of property investment in the Cape Town Central City to be conservatively estimated at R3.555 billion, it bodes well for further growth and investment in the economic hub of the Mother City.’
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The City of Cape Town’s property evaluation also shows sustained growth in the overall official value of all property in the CBD of more than R12.2 billion in 2016/17 to R42.9 billion in 2022.
Kane adds that other key economies that drive business and investment into the CBD include the hospitality, retail and event sectors, which were all also on the rebound by end-2022.
Last year, at least 10 of the 17 sectors that operate in the City’s CBD experienced growth. The number of business entities increased from 2 981 in 2021 to 3 116 in 2022.
According to the report, these were the top five sectors that recorded a positive output:
- Retail
- Legal services
- Medical practices
- General corporates
- Architecture, engineering and surveying
Retail accounts for 1 243 of the 3 116 entities that operate in the CBD, representing an increase of more than 80 new retail outlets that opened their doors in 2022. ‘This sector has recovered steadily since the onset of the pandemic, and in 2022, the total number of retailers had returned to pre-COVID-19 levels, with six more retail entities operating than in pre-COVID-19,’ says Kane.
Furthermore, retail confidence in the Cape Town CBD, as measured in the CCID’s quarterly Business Confidence Index, rose steadily during 2022 despite power cuts and other economic challenges. About 83.3% of retailers surveyed indicated that they were satisfied with current business conditions by the end of 2022. The total volume of retail space available in the CBD by the end of the year amounted to 271 209 square metres, compared to 271 040 square metres in 2021.
Kane adds that there was also a steady improvement in the total retail vacancy rate as ‘footfall returned to town and new retailers opened their doors’. In 2022, the total vacancy rate of retail space (13 183 square metres) amounted to just under 5% of the total retail space available. This marked a great improvement from 9.9% in 2021.
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