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CAPE TOWN CBD ATTRACTS BILLION-RAND HOTEL DEVELOPMENTS

CAPE TOWN CBD ATTRACTS BILLION-RAND HOTEL DEVELOPMENTS

17 April 2019

Cape Town’s CBD has become a magnet for hotel developers with the Foreshore precinct set to benefit from billion-rand developments, indicating that investor confidence is on the rebound in spite of the tight economy.

Several new hotel developments are on the cards including a new five-star hotel set to go up opposite the Cape Town International Convention Centre (CTICC) following the sale of housing company Communicare’s five-storey building at Roggebaai Square. The building was bought by an international buyer for R120 million.

Another interesting development is the proposed mixed-use development on the Foreshore near Culemborg by Amdec called Harbour Arch.

CBD IN DEMAND BY DEVELOPERS

Commenting in the press on the new hotel developments in the CBD, chief executive of Cape Town Tourism Enver Duminy said the new hotels were encouraging signs that “investor confidence was on the rebound” following certain challenges the city had faced, including the crippling drought and a tight economy, which had led to a downturn in visitors.

Citing tourism visa issues and the electricity crisis, Wayne Troughton, chief executive of HTI Consulting, agreed that the odds had been against Cape Town but the city was now experiencing unprecedented levels of interest from international and local operators wanting to invest in the city, especially the CBD.

In a recent report in Business Report, Troughton said the opening of the new Netcare Christiaan Barnard Memorial Hospital, as well as the expansion of the CTICC, had triggered further Foreshore developments, including The Onyx, a residential hotel with apartments on historic Heerengracht.

Cape Town property developer André Krige of Innovate Property and UrbanOn concurred, saying the Foreshore had been earmarked as a development node as the CTICC and its expansion had created a big demand for hotels. “The conferencing market is huge, and the CTICC and its subsequent expansion are big drawcards that have had a very positive effect on hotel development in the Foreshore precinct,” he said.

BUSINESS TOURISM FLOURISHING IN THE CITY CENTRE

The new developments follow confirmation of Cape Town’s popularity as a top business tourist destination with the International Congress and Convention Association ranking the city as the best business tourism city in Africa.

Rob Kane, chairman of the board of the Cape Town Central City Improvement District (CCID) confirmed the trend, saying the recent global reports had put the city “at the top of the pile” in terms of tourism and business tourism. Said Rob: “It is encouraging that hoteliers, many of whom are international, are responding to this trend and focussing on the CBD because it is not only a destination in itself - with its beautiful architecture, vibrant street life and heritage – but an ideal central location from which to explore other parts of the city, the winelands and parts of the Western Cape.”

A prime example is the new downtown hotel located in St Georges Mall, Gorgeous George, set to open mid-April. Created out of two restored heritage buildings, Gorgeous George is the first Cape Town hotel to join the hip-and-happening international Design Hotels stable that comprises a selection of 300 privately owned and operated hotels in over 60 countries which all bear a strong creative and innovative hallmark.

MIXED-USE DEVELOPMENTS

Key to the flurry of new hotels is a new urbanism trend, gaining traction in South Africa where people are buying into developments that provide their daily needs within walking distance. This has prompted the reimagining of precincts by developers into spaces where people can live, work and play as they look for areas that provide a safe and secure environment with easy access to work.

André said another trend, reflected in The Onyx development, was the need for more flexible accommodation options by business visitors and tourists. “The part-hotel concept is gaining popularity as people want more flexibility including a self-catering option,” he said.

To that end, UrbanOn had developed Innscape on Castle Hotel by converting an office block in Castle Street into New York-style luxury studio residential units with their own kitchenette. “Guest feedback has been very positive and occupancy has been excellent,” said André.

Commenting on the new developments, Rob said they all added a “vitality” to the CBD “and pay tribute to the many years of hard work by the CCID, the City and its partners”.