Infrastructure and business growth in the Cape Town CBD is outpacing other metros across South Africa, with construction worth almost R8 billion due to take place in the city over the next five years.
The investment into new developments has substantially increased. An additional R1.872bn has been earmarked in the past year for building within the 1.6km2 central city area.
Fourteen major buildings are receiving either a facelift, expansion or are being constructed from scratch.
Another five buildings are in the planning phase and two more are proposed for an upgrade.
The overall value of property in the CBD is now estimated at about R24bn – four times as much as 10 years ago.
The Central City Improvement District (CCID) released its fourth State of the Cape Town Central City Report on Tuesday, reviewing last year’s developments in the inner city.
CCID chairman Rob Kane said the report highlighted the continued strength of investment confidence in the CBD.
“The public and private sectors play a huge collaborative role in driving this economy to succeed, evidenced in the billions of rands that have come into the area in both buildings and infrastructure.”
The CBD accounts for 25 percent of the metropole’s economy and 30 percent of its workforce.
Kane said estimates by the CCID were “conservative” because the cost of some developments had not yet been announced.
Of the new developments under way, R1.76bn is coming from the private sector, while the public sector is investing R112m, largely to upgrade existing government buildings such as the Iziko South African Museum in the Company’s Garden and the Cape Town station.
Eighty-six percent of businesses which participated in online business surveys used to inform the report, said they would continue doing business in the CBD.
Thirty percent were thinking of expanding their operations in the central city, while 86 percent said they were satisfied with their choice of the CBD as a base for doing business.
But the property development under way shows there is a move away from development strictly for commercial and business use. Hotel accommodation and residential units worth R1.6bn are under construction.
The four hotels under construction will contribute 1 400 beds in the CBD by next year.
The two Tsogo Sun hotels will add an additional 500 rooms.
The refurbishment of Triangle House into a Radisson Blu hotel, will give rise to 11 floors of five-star hotel and another 11 floors of luxury apartments.
In the next year, 200 more residential units would have been built in the inner city.
But they won’t come cheap.
Residential property prices are now averaging R35 000 per m2.
Report author and CCID communications manager Carola Koblitz said there was a concern about the affordability of inner city property and, over the next year, the CCID would be engaging government to discuss densifying the city with residential property for lower income groups.
“It’s very important for the CCID to accommodate other income levels in the city, and we will be looking at policy, protocol and international best practice to lobby government to release tracts of land that are on the immediate boundaries of the CBD.”
Koblitz said the CCID wanted to encourage investment to remain in the city so that it would become a space where families felt safe to explore and enjoy.
Construction under way includes:
* Speaker’s Corner on Church Square for office and retail space.
* Radisson Blue Hotel and Residences in Riebeeck Street worth R1bn to be completed in September.
* A new Tsogo Sun hotel on the old Tulip Hotel site on Buitengracht and Strand streets worth R680m.
* KPMG Place offices and retail space on the Foreshore worth R400m due to be completed next year.
* Phase two of the Cape Town International Convention Centre worth R832m and scheduled for completion this year.
* R330m ongoing construction of the Netcare Christiaan Barnard Memorial Hospital also due to be completed this year.
* The Sentinel residential units worth R200m in Leeuwen Street.
* Offices and retail space at the Twinell Building on Long and Loop streets worth R120m.
* Refurbishment of the Cape Sun Hotel on Strand Street worth R250m.
* Phase two of the redevelopment of the Cape Town Station worth R210m.
* Expansion of the Iziko South African Museum in the Company’s Garden worth R187m to be completed this year.
* A R70m upgrade to the Master of the High Court building to be completed by the end of next year.
* Refurbishment of Wesbank House on Long Street.
* A R1.5bn upgrade to Artscape.
Developments currently in the planning phase include turning the Old Granary on Buitenkant Street into a “peace centre” – a project of the Desmond Tutu Peace Foundation which will cost R42m.
The council is also looking to develop Beaufort House on Bree Street into an electricity depot. Another mixed use commercial rental building with a hotel is being planned for the block of Bree, Hans Strijdom, Loop and Mechau streets.