Cape Town’s Central Business District (CBD) saw a significant surge in property investment in 2022, totaling R3.5 billion across various sectors. The State of Cape Town Central City Report 2022 – A Year in Review (SCCR) highlighted the 22 property developments/redevelopments that took place last year, pointing to a clear path towards growth and stability in the post-COVID-19 era.
Property Development and Redevelopment
The report shows that 4 projects worth over R170 million were completed, while 12 projects worth more than R3 billion were under construction. Additionally, five projects, totaling more than R300 million, were in the planning phase, and one project was proposed. Out of these 22 projects, eight were residential buildings, signaling a strong demand for housing in the city.
Moreover, the CBD saw six commercial projects, four mixed-use buildings, two retail properties, and one parastatal project. The Cape Town Central City Improvement District (CCID) chair, Rob Kane, expressed optimism for the city’s future and the construction sector, which is regaining its pre-COVID momentum.
The City of Cape Town’s property evaluation confirms a sustained growth in the official value of all properties in the CBD. In 2016/17, the value stood at more than R12.2 billion and grew to R42.9 billion in 2022.
Key Sectors Driving Business and Investment
Apart from property development, other key sectors driving business and investment into the CBD include hospitality, retail, and event industries. By the end of 2022, at least 10 out of the 17 sectors operating in the city’s CBD experienced growth. The number of business entities rose from 2,981 in 2021 to 3,116 in 2022.
The retail sector had a significant recovery since the onset of the pandemic, with more than 80 new retail stores opening in 2022. Retail confidence in the Cape Town CBD increased throughout 2022, with around 83.3% of surveyed retailers satisfied with current business conditions. By the end of 2022, the total volume of retail space available in the CBD increased to 271,209 square meters compared to 271,040 square meters in 2021.
The retail industry’s steady improvement also includes a decrease in the total retail vacancy rate. The total vacancy rate of retail space dropped to just under 5% in 2022, compared to the 9.9% recorded in 2021.
In summary, property investment in Cape Town’s CBD has experienced remarkable growth in 2022, with significant investments across various sectors indicating a bright future for the city. The thriving property market, coupled with the revitalization of key industries like retail, legal services, and medical practices, serves as a testament to Cape Town’s resilience and potential for further growth and investment.
