The Cape Town Central Business District (CBD) contributes more than a quarter of the Western Cape's gross domestic product (GDP) each year, as it reigns as one of the country's standout commercial centres.
This is an impressive achievement for one of the fastest growing commercial hubs in Africa. People who work and live in the Cape Town CBD can be proud of what has been achieved through patience, collaboration and effort. It is a prime example of how a CBD can work well in South Africa.
Downtown Cape Town is forever improving because it is managed by teams that want it to succeed. The Cape Town Central City Improvement District (CCID) is one of them. Committed to the success of the Cape Town CBD, it acts on behalf of stakeholders who own commercial and/or residential property within its 1.6 km² footprint. The 22-year-old NPO, in partnership with the City of Cape Town, is on a mission to keep the Mother City's inner city safe, clean and open for business.
In fact, as businesses in SA kick into full gear in 2023, the CCID and its partners have been working around the clock to help the commercial property industry soar this year.
In late January, CCID chairperson Rob Kane addressed a seminar organised by the University of Cape Town’s Urban Real Estate Research Unit where he explained that, while much of SA is battling, with loadshedding and failing infrastructure placing extreme strain upon businesses and families, Cape Town continues to attract investment and to foster innovative commercial ideas.
MOVING ON FROM COVID-19
Kane, who is also CEO of Boxwood Property Fund – an unlisted diversified group – said he felt that businesses in the Mother City had Covid-19 fatigue. They had been able to adjust to government-enforced restrictions, and it was evident that Cape Town had regained much of its momentum. It really was a city attracting investment and talent, once again.
"We are very bullish about 2023. I think we will have a good year; it won't be easy, but I believe it will be good for Cape Town," Kane said. Kane said Boxwood rental revenue was in fact higher in 2022 than it was in 2019, which boded well for 2023.
"During Covid-19 we decided we were going to upgrade some of our buildings. We spent about R70m upgrading two-and-a-half of our properties. People were wagging their fingers, saying we were going to be in real trouble. But we took our rents from R120/m2 on a certain building, which we then rose to R185/m2 and for the same building we have recently achieved R200/m2 in rental. We are finding there are competitors renting buildings at R85/m2 and that isn't sustainable. We are happy with what we were able to do during hard lockdown and the subsequent restrictions," said Kane.
François Viruly, UCT associate professor and director of the Urban Real Estate Research Unit in the Department of Construction Economics and Management, also spoke at the lecture. He gave insights into trends that businesses in Cape Town and the surrounds were facing. He said that the age-old story that it was difficult to build new precincts which generated jobs and created economic output because of geographic constraints – such as the city's mountain landscape – still ran true, but talented thinkers were creating original real estate developments and using space skilfully. Cape Town was a "tenacious place" and still stood out as a place of opportunity.
Kane said that the mix of offices, retail and residential developments were shifting. For example, retail was becoming decentralised. Inner city dwellers would use apps like Checkers Sixty60 and Pick 'n Pay's delivery app to buy and receive their groceries. They then wanted to shop at specialised bricks and mortar stores which may sell top-end electrical goods or even antiques.
He said improving streetscapes through planting trees, for example, had improved the urban landscape and office workers’ experience of their surroundings, and as a result, offices were able to attract around R3 more per square metre.
“There are easy ways of enhancing experiences for tenants and I’m really happy with our efforts,” he said.
Viruly said the Urban Real Estate Research Unit was devising ways of creating more economic output from the Central City. The unit was collaborating with the CCID and the City of Cape Town on a significant project to develop the night-time economy which was justifying all kinds of investment as businesses which traded into the wee hours rented office space in the city.
In recent years, call centres, for example, had rented space across Cape Town CBD. Some of these call centres operated for 24 hours or at least through the night, meaning staff worked nightshifts and needed access to amenities. These people needed better access to services including being able to buy food from restaurants and coffee shops at night, being able to wash clothes in laundromats and also to be able to move around the city safely at night.
One more highlight of the lecture was a discussion into how co-working spaces were still highly in demand in Cape Town CBD. Many entrepreneurs and other small businesses were desiring shared office space.
The CCID is led by CEO Tasso Evangelinos who joined at its inception in 2000, and CCID board chairperson Kane. Its team of skilled, passionate people are genuine public servants for the city and its work bodes well for Cape Town's future.
IMAGES: Carmen Lorraine