CAPE TOWN - The economy of the Cape Town CBD remained stable in 2020 despite Covid-19, as the largest sectors of the town economy — retail, legal services, medical practices, the finance, investment, insurance and banking sector and the accommodation and travel sector — continued to dominate.
Hardest hit was the accommodation and travel sector. Many of the city centre’s hotels closed at the end of March 2020 and have yet to reopen.
This is according to the special Covid-19 edition of the annual State of Cape Town Central City Report 2020 – A Year In Review (SCCR), published by the Cape Town Central City Improvement District (CCID) this week.
The official nominal value of all property was set at R43.8 billion by the City of Cape Town – and at least 31 new developments worth more than R6.9 billion in the pipeline, the report stated.
The shift of where people work has had a huge impact on the Cape Town central city, with commercial landlords having to re-negotiate lease agreements with tenants and implement rent-relief with the aim of keeping retail tenants afloat as they grapple with a drastically reduced CBD footfall.
With 1 038 707m² total commercial office space available in the Cape Town CBD, the office vacancy rate as at Q4 of 2020 was 14.6%.
The total vacancy rate of retail space (31 077 m²) in the CBD in 2020 amounted to 11.5% of the total space available. In 2019, the total vacancy rate of retail space was 9.4%.
Data in the annual report showed steady confidence in the development potential of the CBD, said CCID board chairperson Rob Kane.
“The Cape Town CBD once again proved its resilience in a very tough year. While some businesses have closed, many others have survived the first Covid-19 year and it is very encouraging to note that investor and property development interest in the city centre remains steady,” said Kane.
Of the 31 new developments (recently completed, currently under way, planned or proposed in the CBD), five were completed in 2020 with an estimated value of R972 million, 15 were under construction in 2020 with an estimated value at R2.9 billion, nine were in the planning phase and conservatively valued at R2 billion and and two were proposed valued at around R860 million.
Key developments include Abland’s P-grade skyscraper 35 Lower Long valued at R500 million, Ryan Joffe Properties’s The Rockefeller at Harbour Place valued at R500 million, and WBHO’s Hotel Sky valued at R400 million.
Wesgro chief executive Tim Harris said: “One of the most significant ‘outcomes of the pandemic has been the impact on innovation on a global scale, with technology playing an increasingly key role in enabling organisations to respond to disruption. What is evident is that the organisations which have successfully survived the months since March 2020 are those that had already embraced automation, digitisation, big data and the use of collaboration platforms before the onset of the pandemic.”
He said the region attracted significant investment in the DigiTech space cover the past 12 months despite exceptionally tough global business conditions.
Cape Times