The City of Cape Town’s Council has announced the possible adoption of smart real estate services to extract and to maximize the economic and social return from its assets.
During a recent Council address, the City’s Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos said that going forward, the City of Cape Town must be committed to fully exploring the opportunity to incorporate the deployment and utilisation of the City’s immovable property asset portfolio as a pillar of our economic recovery.
“The property transactions approved by Council today demonstrate the City’s determination to extract not only the best economic value from our property transactions but also the social value”.
“Real estate underpins so many elements of our economic recovery. It creates jobs through construction, generates revenue for municipal service delivery and yes, provides roofs over our people’s heads. Going forward, our transactions will continue to represent the benefits of adopting a socio-economic lens while navigating the procedures and processes set out in the MFMA”.
“The pledge of the City’s Economic Opportunities and Asset Management team is to continue to work hard to prioritise generating a steady stream of opportunities (large and small) for all to participate”.
Alderman Vos explained that this smart approach will take different forms:
This will continue to allow participation by individual purchasers, giving real opportunities to residents to invest in their own property or business venture. In 2019, the City of Cape Town successfully sold and transferred approximately 60 properties. The total value of these transactions concluded was over R105 million where more than 40% of the transactions concluded were to individual purchasers.
Prioritised disposals and long-term lease agreements for social good
The City of Cape Town has recently approved the Bay View land disposal for the False Bay College. The City agreed that given educational contribution, and the social/community value that will be received in exchange for the land, the adoption of the lowest transaction price permitted was agreed upon – in terms of the City’s policy and municipal regulations.
Furthermore, the City has approved the recommendation to commence with a public participation process to request comment on the City’s intention to conclude a lease between PEDI and the City to revitalise the Philippi Fresh Produce Market.
“At last, through our partnership with PEDI, we are in a position to revitalise and create a facility to facilitate a more cost-effective distribution of fresh produce, thereby boosting the emerging farming sector and acting as a development catalyst for the Greater Philippi area. That is what smart property transactions are all about – identifying and creating the conditions to extract the best socio-economic use and or value from our immovable property portfolio” comments Alderman Vos.
By approving the next steps related to entering into a long-term lease agreement, the City of Cape Town is investing in the Cape Town Market. The proposed long-term lease will unlock the overdue upgrade and incorporation of the informal market.
The City will continue to receive a market-related rental, with the security of tenure provided through a long-term lease agreement allowing the Cape Town Market to reinvest in the footprint – recapitalising the asset. This process will include facilitating the modernising of the facility and incorporating a footprint for the informal market traders.
The current lease expires in February 2024 and it makes good business sense to procure a new lease of the property to ensure that there is no interruption to the ongoing market operations from the current lease to the new one.
“We understand that the function of the market within the regional food distribution system is vital with regards to food security for the people of Cape Town”.
“This transaction provides the opportunities to secure a significant strategic economic asset in the form of a function fresh produce market, to recapitalise an ageing capital asset at no direct cost to the City and, to resolve a long-standing social and environmental problem through the relocation of the irregular Buite Mark informal traders from their current location” concludes Alderman Vos.