24HR emergency NUMBER: 082 415 7127 report an incident

Building a prosperous CBD

Building a prosperous CBD

BY SHARON SOROUR-MORRIS
8 October 2019

Exciting new property developments in the Central City worth more than R950 million have been reported this year, including The Duke and LABOTESSA boutique hotel, as investors continue to pour millions of rands into the CBD.

The investment update on the value of property in the Central City was presented at the CCID’s annual Business Breakfast in September, when highlights of the seventh report on the economy of the CBD, The State of Cape Town Central City Report 2018 – A year in review were presented, as well as key findings since its release in July.

A total of six new developments, worth in excess of R968 million, have been reported in 2019 thus far. They include three hotels, which have opened their doors: the five-star Gorgeous George in St Georges Mall, which has 32 rooms and is worth R100 million; the five-star LABOTESSA on historic Church Square, which has seven suites and is worth R75 million; and the three-star Signature Lux Foreshore, at 31A Heerengracht Street, which has 157 rooms and is worth R210 million. The three hotels add a further 196 rooms to the city centre’s hotel pool.

The other three comprise one mixed-use development, Foreshore Place (worth R373 million), which will have both residential and commercial space, and two residential developments, namely The Duke (worth R150 million) and Fleetway House (worth R60 million).

GROWING DEMAND FOR SECTIONAL TITLE LIVING

According to Dr Andrew Golding, chief executive of the Pam Golding Property Group, demand is increasing for sectional title units in apartment complexes that are in easily accessible locations. “With South Africa’s young demographic profile, it is hardly surprising that there is a growing demand for sectional title living, not only from first-time and young buyers opting for apartment living, but from home owners across all ages who are seeking smaller homes in more convenient locations.”

Buying into this trend, Foreshore Place (previously the iconic Absa building), will have 34 floors on completion, including 15 floors of commercial space above which will be 11 floors of residential units comprising over 100 one- and two-bedroom apartments as well as 63 studio apartments. The ground floor will accommodate food, coffee and other retail outlets, as well as banking facilities.

The Duke on Fountain Circle is another development that speaks to the need for competitively priced, luxury inner-city accommodation. Apartments are priced from R1.20 million, and with no transfer duties, they are below the average price of residential units in the CBD. Developers Mosaic Group believe this also allows investors to take advantage of a vibrant buy-to-let Airbnb market that is taking off in the Foreshore precinct.

VALUE OF CITY CENTRE PROPERTY SOARS

When the SCCR was launched in July (which presents the year in review), it was revealed that the value of property in the Central City had soared by nearly 40%, from R30.628bn in 2016/2017 to R42.860bn in 2018/2019, with a total of 39 new developments worth in excess of R13.58bn either recently completed, under construction or in the pipeline.

The six new developments (and including an estimated R130 million for City Park which was not included in the SCCR 2018 estimate), increase the total of recently completed, under construction, planned and proposed developments to a total of R14.679bn.

Commenting on the developments, CCID chairperson Rob Kane said while the rest of the country’s economy was under huge pressure, Cape Town was seeing more spending in the CBD in general. “Since 2016, property valuations have climbed from just over R6bn to close to R43bn in 12 years,” Rob said.

He noted that while the overall value of properties was likely to change with the adjudication of objections in the City of Cape Town’s current round of updating the General Valuation roll, the CCID was heartened by the increase in gross valuation for the Cape Town CBD.

Data in the seventh edition of the SCCR, which is indispensable to investors, developers and retailers seeking to invest in the dynamic Cape Town CBD, showed sustained confidence in the development potential of the Central City, Rob said.

Images by: Ed Suter, Anita van Zyl, Scott Arendse (CCID Online Coordinator)

Tags: State of Cape Town Central City Report SCCR CCID investment