An aerial view of central Cape Town.
Released this week, The State of Cape Town Central City Report: 2015 – A year in review highlights the continued strength of investment confidence driving the Cape Town CBD, an area that accounts for over 25% of the metro-pole’s economy and 30% of its workforce.
Published for four years now by the Cape Town Central City Improvement District (CCID), The State of Cape Town Central City Report details more than R8 billion of new investment to be made into South Africa’s oldest downtown within the next five years – and provides analysis on the major sectors that are influencing growth in the CBD – from the roll out of accessible and affordable broadband in a pilot project being championed by the City of Cape Town, to the CBD’s ever-increasing night-time economy and residential desirability.
Says Rob Kane, chairperson of the CCID: “The public and private sectors play a huge collaborative role in driving this economy to succeed, evidenced in the billions of Rands that have come into the area in both buildings and infrastructure. As a result, we’ve seen the value of property here rise from R6.127 billion around 2005 to well over R24 billion in just over a decade, and conservatively this is expected to be well over R32 billion within five years”.
“Over the course of 2015, and since the launch of the report previous to this one [2014 in review], we’ve seen, conservatively, another R1.872bn of investment committed to the CBD.”
Kane explains that this is “conservative” as the costs of some developments announced 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.”
The R1.872bn includes R1.76bn of private investment, and another R112 million to be invested by the public sector, largely in upgrades to existing government buildings.
With surveys forming a crucial component of the report, the 2015 edition includes the results of an online business survey conducted with CBD-based enterprises (which revealed that 86% of businesses intended to remain in the area and 30% were thinking of expanding), a formal retail opinion survey (in which 86% expressed their satisfaction of having chosen the CBD as a base for business), and a survey on the popular First Thursdays event in a section that particularly looked at the expanding night-time economy and the opportunities that exist in this sector for supply to meet demand.
Many of these opportunities are also highlighted in the CCID’s annual online residential survey, also contained in the report. The results demonstrated once again that residents in the CBD (the population of which is now estimated to be well in excess of 6 000) have a desire to see retail with longer opening hours beyond 17h00, more delicatessen-type food stores and more restaurants.
Each year the report also highlights different sectors that have been identified as making ever-increasing contributions to the economy of the CBD, with spotlights in this year’s report including the legal sector and creative economies.
CCID Communications Manager and author of the 2015 Report, Carola Koblitz, says: “The key factor in noting how significant these sectors are, is when the sectors themselves begin to form ‘neighbourhoods’. 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, where greenfield opportunities have given rise to striking, contemporary architecture. 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.”
First featured in the 2012 report, there is an update on the rise of the Foreshore, and the more recent rise of Bree Street is also examined.
Another primary factor that is now positioning the CBD as a frontrunner for those looking for new business premises is the City’s pilot project in the CBD that leverages the rollout of its fibre-optic broadband network for use by the private sector. With R1.7 billion being spent by the City throughout the metro to connect its own buildings and facilities, as well as those of the Western Cape Government, the network is now robust and extensive enough for the City to install cables to buildings that enable commercial operators to use the infrastructure to provide competitive, high-speed (1Gbps) fibre-based services to tenants of commercial buildings. As a result of the pilot project being run in the CBD, 35 buildings had already been connected as at June 2015 and it is estimated that over 1 000 will be connected by June 2021.
Other features of The State of Cape Town Central City Report: 2015 – A year in review include:
· A property investment map, showing the locations of all known developments in the CBD (at the time of going to print)
· Comparative year-on-year commercial property rental and vacancy rates, as well as retail occupancy rates
· Information on the numerous commercial property tools available to investors via government resources, including the City of Cape Town’s Economic Areas Management Programme (ECAMP), Development Application Management System (DAMS), 3D Building Modelling system pilot programme, and South African Revenue Service’s Urban Development Zone (UDZ) tax incentive, in which the Cape Town CBD falls
· Residential property trends over the course of 2015, and a map of the CBD showing the locations of current residential blocks that appear on the deeds office registry
· Advice on taking the “green leap” in a section on the Green Economy of the Central City.
While the report also contains some research conducted by the CCID, Kane notes that over the years the wealth of well-researched data that has willingly been contributed from other sources has been extremely rewarding, as well as the support the report receives not only from the media but from government agencies at the City of Cape Town, Western Cape Government and significant investment agencies such as Wesgro.