Looking at the Cape Town Central City Improvement District’s (CCID) latest state of the central city report you would be forgiven for thinking 2016 was the middle of a boom time.
More than R8 billion worth of developments are under construction or in the planning phase in the 1,6 square kilometres that make up Cape Town’s CBD. And, says Rob Kane, chairman of the CCID, that is a conservative estimate because the costs of some developments have not yet been revealed by the developers.
“While there is clearly a lot more than this on the cards, we only quote the amounts we can confirm,” he added.
It is a varied city in terms of what services are plentiful in town, but certain professions are really driving the growth with industry clusters popping up in certain neighbourhoods, such as legal districts and the creative cluster.
CCID communications manager and author of the 2015 report, Carola Koblitz, said: “We now have two such legal neighbourhoods in the CBD – with advocates clustering around the High Court on the older side of town close to the Company’s Garden and the large legal firms rising in their own named buildings in the Foreshore area on the other side of town.
“Likewise, the creative industries are now clustering in the East City area, where an increasing number of very affordable co-working spaces exist – ideal for start-ups,” she added.
But it is not just businesses that are investing in the Mother City. Homeboys, hipsters and hoteliers are also buying into the Cape Town CBD, which accounts for more than 25 percent of the metropole’s economy and 30 percent of its workforce.
Approximately 200 new residential units are due to be released to market in the CBD within the next year. The average sale price has increased from R1,55m in 2014 to more than R2m last year.
In 2013, the total value of residential units sold in the CBD was R249m for 163 units. In 2014 it was R296m for 191 units and last year the total was R376m for just 185 units.
Demand for rental properties is robust too. The average monthly rent for a studio apartment in town is now more than R10,000, while a one-bedroom costs close to R16,000, a two-bedroom around R20,000 and a three-bedroom R36,000.
As is the case in many modern global cities, such as New York, London and Paris, people are reversing the earlier flight to the suburbs and moving back into regenerated town centres. New builds in Cape Town tend to be designed for mixed use rather than being commercial or residential. Recently announced developments accounting for more than R1,5bn are mixed use properties including space for homes and hotels.
Cape Town gets high marks when it comes to that other essential in a world-class modern city: high-speed connectivity. The City of Cape Town is piloting a project in the CBD that will give every building access to a 1 gigabit per second fibre optic network within five years
In the 2013/2014 financial year, the City of Cape Town calculated the official nominal value of all property in the CBD to be R23,725bn, a hefty increase from the R6,127 billion valuation in 2005/06.
The increased value is not just measured in rands and cents though. The 2015 report includes the results of an online business survey, which revealed that 86 percent of businesses intended to remain in the CBD and 30 percent were thinking of expanding. A formal retail opinion survey, also included, showed an 86 percent satisfaction rate in having chosen the CBD as a base for business.
The CCID report also highlights opportunities for businesses showing, for example, a strong desire among the city’s residential population, which is estimated to exceed 6,000, for longer retail opening hours and more delicatessen-type food stores and restaurants.
An ebook version of the 2015 report is available on the CCID website: www.capetownccid.org/about-ccid/publications