select
|

The game changers transforming the Cape Town central city

Property investment is one of the biggest game changers transforming the Cape Town Central City, and so far this year seven new developments or redevelopments have been confirmed, at least three of them with a combined value of some R270 million.
 
Through the publication each year of the annual investment guide, The State of Cape Town Central City Report, the Cape Town Central City Improvement District (CCID) has managed to keep tabs on the major game changers across the board that are transforming its downtown area.
 
This is according to Rob Kane, Chairperson of the CCID, speaking this morning at the organisation’s annual business breakfast, held at Media24’s Nasdak facility, which was also addressed by Dion Chang, one of South Africa’s most respected trend analysts and owner/founder of Flux Trends, who spoke on “trends as business strategy”.
 
The CCID has published the annual investment guide for the past four years, tracking the growth of various business and leisure sectors, as well as the rise of geographical nodes in the Central City. In terms of the former, the legal, creative, financial, healthcare and publishing sectors had already been identified over the years as strong contributors to the CBD’s economy. In terms of the latter, sectors included the night-time and afterhours economies as well as the residential sector.
 
Commenting on the rise of the Foreshore node since 2012, the report’s editor and co-author, Carola Koblitz, noted that back in 2012, the CCID’s first report recorded an investment value into the area of around R3.2 billion, which at the time included the development of projects such as Portside, Touchstone House, 22 Bree, Atlantic Centre, the Civic Centre update and the CTICC expansion.
 
“In 2012,” notes Koblitz, “we had yet to hear of investments such as Roggebaai Place, 33 Heerengracht, the Media24 upgrade, The Towers redevelopment, the Parkalot building, the upgrade to the entire Artscape complex, upgrade to Southern Sun Waterfront, the KPMG building, the redevelopment of Triangle House by Signatura, the Thomas Patullo redevelopment, the Modern, 19a Loop Street, theLINK, Goldies or even the new Christiaan Barnard Memorial Hospital. These developments added almost R4.6 billion to our original 2012 figures, bringing the investment just into the Foreshore since 2012 to just under R8 billion in that area alone.
 
“Add to that the fact that the V&A Waterfront’s most recent developments are expanding towards the Foreshore, and that there are a number of other development happening within the harbour area to the north of the CTICC, and what we are going to see is a very exciting reconnection of the CBD to the sea.”
 
The Bree Street economy had been identified as another node to watch, as it moved towards the CBD’s first true 24-hour economy, with daytime retail and businesses in operation, popular after-work venues where people met for drinks before heading home, the recent rise of restaurants and then late-night bar and entertainment venues.
 
Add to this, says Koblitz: “A substantial amount of residential and hotel accommodation – both existing as well as under construction – happening on or in close proximity to this street.  
 
“Over the past year, we’ve recorded shops and eateries opening along Bree at the rate of one a month, and now the streets that lie in close proximity to it are starting to redevelop as well in exciting new ways.”
 
Overall property values in the CBD have also increased substantially.  Explains Kane: “In 2006, the City’s official valuation of the downtown sat at just over R6.1 billion. By the 2014/15 financial year, this official valuation had risen to close to R24 billion.
 
“By the end of 2015, when the latest report went to print, we estimated conservatively that another R8.2bn would be added to this figure over the next five years, with a total valuation close to R32bn by 2020 across 26 projects.  And since January 2016, we’ve heard of at least another seven development projects coming on board. We do not yet know what they will add to the R32bn, but it does illustrate how intensively the CBD is changing – and across its entire footprint, from the Foreshore to the older part of the CBD.
 
Another large transformer of the economic landscape of the CBD is the rollout of the City’s own fibre-optic broadband network. With R1.7 billion being spent by the City throughout the metro to connect its own buildings as well as those of the Western Cape Government, the network is now robust and extensive enough for the City to install cables to private buildings. With a pilot project being rolled out by the City’s Telecommunications Branch in the Cape Town CBD, to date 50 private buildings had already been connected. The project now also incorporated the involvement of the CCID, who were assisting the City to make contact with the various private property owners with premises in the area. 
 
According to Tasso Evangelinos, Chief Operating Officer of the CCID: “It is estimated that by June 2021, approximately 1 000 in the CBD buildings will be connected. So for those of you who’ve noticed the large amounts of trenching going on around here, please bear with it: the end results will be well worth the inconvenience and upheaval!”
 
Another interesting game changer in the CBD, had been the rapid update over the past year of vacant commercial space.
 
Notes Koblitz: “At the first quarter of 2014, this was sitting at an average of 14.4%. Portside had opened its doors as had Roggebaai Place, and other office complexes were waiting at the time to come on line. And the big question at the time – from within the property industry and the media – was: is that space going to fill?  There were certainly high vacancy rates in Premium grade at the time, but C grade vacancies were also very high.”
 
However, by the final quarter of 2015, commercial vacancies had decreased dramatically to 10%, on average.
 
Retail had also been faring well, with an overall occupancy rate during 2015 of 95%. 
 
Says Kane: “We believe a lot of opportunity still exists in retail – from the growing daily office complement and the expanding nighttime economy, to the events and other opportunities that are bringing families into the after-hours market of the CBD, and of course, the growing
residential component.”
 
Notes Koblitz: “Back in 2000, we had a residential population in the CBD of no more than around 750 people.  Today, we estimate that this has now reached close to 7 000.”

Residential property values had also increased on average from R1.4m in 2013 to just over R2m by the end of 2015.  Says Kane: “In terms of R/m2, we’ve seen an increase from R17 500/m2 in 2013 to over R24 000/m2 in 2015. Over just the past year, we’ve seen a 27% year-on-year increase, and we estimate this will continue to increase conservatively by another 32% by the end of this year.
 
“We’ve obviously identified a very real need for more affordable housing, but we understand that this demand is seldom met only by private development. For this to happen, there needs to be public-private partnerships on land currently owned by government. And interestingly, we still have quite a bit of this in the CBD and right on its borders.”
 
There was also a need for more student accommodation, says Koblitz: “But over the past few years, we’ve seen some very interesting repurposing of old C-grade buildings becoming really good quality accommodation for students – some of which is also being used by young professionals just starting out.
 
“So certainly, there are many opportunities in the residential sector still, providing there is a clear understanding and analysis of market needs.”
 
Keeping with the theme of “game changers”, Dion Chang gave his insights in a presentation “The Business of Disruption – the ripple effects of game changing technologies.”
 
Chang notes that business collaboration is going to be the lifeblood of 21st century commerce, which is particularly important for companies operating in close quarters such as a CBD.
 
“We live in an on-demand economy, which is only going to get more so in future and it’s no longer big companies versus small companies; it’s about how fast you can move and the user experience memory you leave behind.”
 
He says companies and their staff should not feel threatened by technology, because while the doors will close on some options, many more opportunities will be created. Citing the example of online retail giant Amazon (which is currently testing drone delivery systems in five countries outside of the US), Chang explains their Prime delivery option in the States, which sees packages delivered within 30 minutes of ordering utilising informal, flexi-time “drivers” who are resident in the area and deliver parcels for a fee as and when it suits their schedule to be available to the company.
 
Chang also advises developers currently planning new residential and commercial buildings to include drone landing pads in their designs, because these will become an everyday feature of the landscape within a few short years. Currently high congestion traffic zones such as the CBD could also conceivably become free of private cars in future, replaced by technology-driven services such as Uber and smartphone-controlled car-sharing.
-end-


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 21 Feb 2018
      These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK