Cape Town’s CBD post-Covid-19 economy is on the rebound with property investment in the inner city in 2022 exceeding R3.555 billion, according to the key findings of the latest edition of the State of Cape Town Central City Report 2022 – A Year in Review (SCCR).
A total of 22 property developments or redevelopments were recorded last year; four were completed (worth in excess of R170 million) with twelve under construction (worth in excess of R3.085 billion) and five in the planning phase (worth in excess of R300 million) – with one proposed development.
Of the 22 projects, eight were residential buildings, six were commercial buildings, four were mixed-use, two were retail buildings, and one was a parastatal.
The most significant indicator of investor confidence in the Cape Town Central City is the sustained growth in the overall official value of all property in the CBD of more than R12.2 billion in 2016/17 to R42.9 billion in 2022, according to the City of Cape Town’s property evaluation.Rob Kane, CCID board chairperson, says apart from the construction sector showing an impressive post-Covid recovery, other key economies that drive business and investment into the Cape Town CBD, namely the hospitality, retail, and event sectors, were also all on the rebound by the end of 2022.
At least 10 of the 17 sectors that operate in the Cape Town CBD experienced growth in 2022 with the number of business entities overall increasing by 135, from 2 981 in 2021 to 3 116 in 2022.
The top five sectors that recorded a positive output were the retail; legal services; medical practices; general corporates and head offices; and architecture, engineering, and surveying sectors.
The key economic sector, namely retail – which makes up 1 243 of the 3 116 entities doing business in the Cape Town CBD – increased its footprint in 2022 with more than 80 new retail outlets opening their doors.
This sector has recovered steadily since the onset of the pandemic, and in 2022, the total number of retailers had returned to pre-Covid levels, with six more retail entities operating than in 2019, before Covid-19 hit.
Despite power cuts and other economic challenges, retail confidence in the Cape Town CBD, as measured in the CCID’s quarterly Business Confidence Index, also rose steadily in 2022, with 83.3 % of retailers surveyed indicating they were “satisfied” with current business conditions at the end of the year.
The report states that the total volume (m²) of retail space available in the Cape Town CBD in 2022 at the end of 2022 amounted to 271 209 m², marginally above the 271 040 m² recorded at the end of 2021. Meanwhile, the total retail space occupied in 2022 was 258 024 m², which was an increase of 13 731 m² (5.6 %) from the 244 293 m² recorded in 2021.
The total vacancy rate of retail space in the Cape Town CBD – 13 183 m² – amounted to just under 5.0 % of the total retail space available. In 2021, it was 9.9 %.
“In 2022 there was a steady improvement in the total retail vacancy rate as footfall returned to town and new retailers opened their doors,” Kane notes.
Other key findings in the SCCR include:
- In its assessment of the commercial sector, the report notes that the CBD still has the largest share (+39.5 %) of the total office space in the city of Cape Town, as measured by the SA Property Owners’ Association (SAPOA).
- In recent years, the CBD had the city’s most competitively priced premium-grade office space but by the end of 2022, it had lost this position to Century City. The CBD still has the second largest percentage of P-grade office space – 29.8 % in total compared to 35.1 % in Century City.
- The office vacancy rate in the Cape Town CBD at the end of 2022 was 13.3 %, which is an improvement from the 16.1 % recorded in 2021.
