Cape Town CBD property development continued through last year’s crisis
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Cape Town Central City remained a commercial and residential property investment node through 2020, despite the crushing impact of Covid-19 on the construction industry, with total estimated developments of R972 million being completed.
The latest annual State of Cape Town Central City Report said some of the key commercial properties completed included Abland’s R500 million 35 Lower Long, the R75m WINK Foreshore and Urban Oasis in the East City and the R400m Hotel Sky and the Old Bank Hotel.
The estimated value of all developments in the completed, under construction, planned and proposed phases was valued conservatively at R6.7 billion, according to the report, which is published annually by the Cape Town Central City Improvement District (CCID).
Investor confidence in the city was on the rebound despite challenges facing the Cape Town metropole, as it grappled with the economic downturn brought on by the coronavirus pandemic and stringent lockdown regulations.
The overall official nominal value of all property in the Cape Town CBD according to the City of Cape Town’s 2018/2019 property evaluation, is R43.8bn.
In 2020, the key commercial development that changed the city’s skyline was Abland’s R500m 35 Lower Long, which added 14 080m² of office space, bringing the total increase of office space in 2020 to just 15 180m², with a total market stock of 1 038 707m² in the fourth quarter of 2020, according to South African Property Owners Association’s (SAPOA) Office Vacancy Report.
Within the Cape metropole, the central city has the largest share (39.2 percent) of total office space, followed by Bellville (21.4 percent).
Other commercial developments completed in the central city in 2020 according to the report include two aparthotels namely the R75m WINK Foreshore and Urban Oasis in the East City. Two hotels were under construction in 2020 in spite of Covid-19 bringing the hospitality industry to its knees. Both have subsequently opened their doors to visitors.
Developers have also been influenced by the global urbanism trend which has seen people buying into mixed-use developments – that include both commercial and residential components.
The development of the Absa building into Foreshore Place, which was under construction in 2020, was an example of this. The R373m mixed-use complex had 11 floors of residential units above 15 floors of commercial space with retail outlets on the ground floor.
The majority of the 15 developments under construction, with a total estimated value of R2.9bn - in the Cape Town central city in 2020, were residential, including two developments on the Foreshore, The Rockefeller at Harbour Place (R500m) and 16 on Bree (R860m).
The conversion of the Cape Town icon The Townhouse Hotel into Neighbourgood East City (R80m) saw the hotel being repurposed into a neighbourhood-centric development offering short-, medium- and long-term fully furnished rental units only. Developers Neighbourgood were also converting an Adderley St landmark into Neighbourgood Reserve, which would offer upmarket loft apartments to the rental market, buying into the global digital nomad visitor trend.
Construction of the R150m heritage development, The Barracks, also began in 2020 following a decade of planning, proposals and permissions.
The office vacancy rate in the Cape Town CBD was 14.6 percent in 2020.
BUSINESS REPORT ONLINE