R24bn spent on Cape CBD could double property value in next 10 years
Cape Town - A report that has been released by the Cape Town Central City Improvement District (CCID) has revealed that investment worth R23.954 billion has been committed to the Cape Town central city since the beginning of last year.
This includes developments that opened their doors during 2017 (R3.548bn), as well as those currently under construction (R4.550bn), in the planning stage (R1.630bn) or proposed R14.226bn). This is considerably up from the R16.232bn worth in investment noted in the 2016 report.
Published for the sixth year in a row by the CCID, the report, which reflects on the economic climate in the CBD across the previous year, indicates that, despite enormous economic pressure on the country, Cape Town’s downtown continues to attract investors and maintain confidence in the property marketplace across commercial, retail and residential sectors.
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“We always use the term ‘conservatively’ when we record the investment being made into the CBD because we only list costs for developments for which we have been able to confirm values. Not all developers are prepared to reveal the estimated values of the projects with which they are involved. Hence, the actual figure would be higher than what we release in the report, but we base our information on what is available in the public domain,” chairperson of the CCID Rob Kane said.
With the City of Cape Town’s last property valuation, released for the 2016 and 2017 financial year and reflecting a value at the time of over R30.628bn, the new investments listed in the report at R23.954bn could see official property valuations in the CBD therefore close to doubling within the next five to 10 years.
Commercial property has also held its own over the past year in the central city, with the 2017 report reflecting vacancies at 9.9%, while retail vacancies across the CBD stood at only 7% for the year under review.
“We are particularly heartened that retail is doing well in the central city as we know it’s a tough economy out there. Which is why, each year, the report also takes a close look at upcoming trends on the horizon so that we can pass these opportunities on to our retail community and prepare them for what lies ahead; for example, in the merging of online and in-store customer experiences,” said CCID communications manager and the editor of the report, Carola Koblitz.
Among other opportunities taken up from previous reports, she said there had been a rise in the CBD’s east city precinct. “Also known to the CCID as Precinct 4, this is the area that lies largely between the Grand Parade and the Roeland Street side of town,” Koblitz said.
Kane said developers keen to bring new residential units on line must understand both the CBD’s market saturation point as well as where the real needs lie.