Cape Town - In efforts to make the Cape Town Stadium more financially viable, the city council plans to lease spaces and parking within the precinct for 10 years.
A city council valuation report estimates the council could earn a rental income of between R2 million and R5 million in the first year, depending on installation and construction costs to transform the space, which valuers have described as a “raw concrete shell”.
The stadium has about 1000 internal parking bays and internal spaces of 5006 square metres, which includes 4113 square metres of commercial rentable space and 893 sqaure metres of storage space.
The council would take responsibility for all installation costs, while the lessee would be responsible for all general internal maintenance.
With the areas having been identified as surplus to the council’s requirements, the council wants to lease out the internal spaces directly by public competition while the internal parking bays are to be leased out through a competitive process to an operator who would, in turn, lease it out to the market.
The council’s valuation department estimates the internal spaces can draw income of about R60 per square metre per month for the retail space excluding value added tax, R40 per square metre for office space and about R20 per square metre for storage space.
The parking has been valued at R1000 per bay per month for basement parking, and R500 per bay for retail parking.
The stadium precinct was rezoned for general business use in November 2015.
Council will be asked at a meeting next week to approve a public participation process that would last for three months and start in November.
The council is bound to conduct a public participation process for the long-term right to use, control or manage any municipal asset worth more than R10 million.
The council’s valuation report indicated the rental determination could not be assessed in isolation of the capital and operational expenditure to be incurred.
“In order for the venture to be sustainable, the rental quantum would need to be assessed based on the envisaged proposal and the cost implications applicable to the redevelopment,” the report said.
The council is still trying to find a long-term anchor tenant for the stadium.
It recently issued a tender for the long-term leasing of a property adjacent to the stadium on Granger Bay Boulevard, which it believes could attract construction worth R600 million.
In a report considered by the mayoral committee this week, the council said the intention was to commercialise the stadium precinct in line with a business plan aimed at optimising the development opportunities and marketability of the stadium.
Acting mayoral committee member for finance Johan van der Merwe said the two leases would not only generate an income for the council, but enhance the public use of thespace.
“The stadium is strategically located with good public transport access and it must be noted that the area lends itself to a range of urban opportunities, which must be explored,” he said.
On average only about 27 events are hosted at the stadium each year, and the council loses more than R50 million abnnayaly a year on the stadium due to low usage and high maintenance costs.