Huge changes for Cape Town’s inner city and financial district

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The Cape Town Central City Improvement District (CCID) has released its latest State of Cape Town Central City report, highlighting strong investment growth in new and future developments in the mother city.

In Cape Town’s CBD, a total of 13 real estate developments or redevelopments worth more than R2.5 billion were completed in 2021, despite advancing lockdown restrictions due to the pandemic, it said.

The 13 projects are part of a total of 28 real estate investments to be commissioned in Cape Town in 2021 – either completed, under construction or in the planning stage – collectively and conservatively valued at R5.717 billion.

The developments under construction in 2021 are valued at R1.732 billion, while those in the planning stage are conservatively estimated at over R1.5 billion.

These are some of the key findings of the latest State of Cape Town Central City Report – A Year in Review (SCCR), published by the CCID.

Data in the annual report — which is a sought-after investment vehicle indispensable for investors, developers and retailers looking to invest in South Africa’s most successful and dynamic city center — demonstrates continued confidence in the Central City’s development and business investment potential, it said. the CCID Board Chairman and CEO of Boxwood Property Fund, Rob Kane.

“With the total value of all property in Cape Town set at R43.8 billion according to the Cape Town City’s 2018/2019 real estate review, it is clear that Cape Town’s CBD remains one of the country’s top real estate investment destinations. said Kane.

New developments and redevelopments to be completed in 2021 include five hotels/aparthotels – The Rockefeller, Hotel Sky, BlackBrick Cape Town, The Capital 15 on Orange and Old Bank Hotel – valued at over R1 billion, all of which were completed last year. opened.

Three residential projects worth more than R895 million were also completed, including the residential complex 16 on Bree (R860 million), and three mixed-use projects worth more than R523 million, including Foreshore Place (R373 million).

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“The myriad of mixed-use homes and buildings entering the CBD real estate market indicate that flexible developers — many of whom have reconfigured commercial space to accommodate a changing inner-city real estate climate — are confident there is a market is for buyers,” said Kane.

According to the report, the notable real estate trend in 2021 was still the conversion of office buildings to mixed-use developments to provide both commercial and residential properties and provide buyers with flexible housing options, as well as optimizing the co-living, co-working trend.

Two key mixed-use developments in 2021 that were under construction were The Rubik (R500 million) and One Thibault (R500 million).

Connected living, a trend that emerged in 2020, was still prevalent in 2021, with Neighbourgood, a neighborhood-focused real estate development company, setting the trend.

Neighbourgood is responsible for two developments in Central City, namely the refurbishment of the old Townhouse Hotel in Neighbourgood East City (R80 million) – with fully furnished units offering flexible rental options, convenience and exceptional amenities – and Neighbourgood Reserve (R75 million), which studio units, office space and a meeting location.

All units are for hire only, with “members” having access to common areas and attending events at other Neighbourgood properties in greater Cape Town.

According to the report, housing recovered in the CBD last year, with the number of residential buildings increasing from 69 in 2020 to 77 in 2021. The median price of apartments rose by 32.8%, from R1.28 million in 2020 to R1. 7 million in 2021.

Harbor Arch, the R16 billion Amdec Group development in Cape Town’s CBD is just outside the CCID’s geographic footprint and is therefore excluded from the total value of new inner-city real estate investment in 2021. All data in the 2021 SCCR relates on real estate and businesses in the CCID’s 1.6 square kilometer footprint.

Cape Town Approves R14 Billion Foreshore Development – Despite Objections

The 34-storey high-rise, ‘Foreshore Place’ – widely regarded as ‘The Absa Building’ due to its signage – is coming to market and will be sold as a mixed-use building in the city‘s new financial district, according to Galetti Corporate Real Estate.

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The building is located in the Foreshore – Cape Town’s financial district with the offices of Standard Bank, FNB, Luno and many other well-known companies all within walking distance.

“People value lifestyle and convenience more by choosing mixed developments that combine retail, residential and commercial all under one roof,” says Justine Adriaanzen, commercial real estate agent at Galetti Corporate Real Estate.

Foreshore Place offers 13 floors of dedicated office space, 11 floors of residential apartments, a retail floor, five floors of parking and a multi-storey hotel of its own that will be operated by an international hospitality brand.

“The design and mix of offerings within Foreshore Place are strongly driven by what millennials and Gen-Z employees consider important when choosing where to call home,” says Adriaanzen.

“With the influx of people moving to Cape Town from other parts of the country and the space in the city at a premium, we knew we had to be smart and creative in what we would offer to differentiate ourselves.”

Hence the provision of five parking levels in a city where safe parking on the street is a luxury. Other priorities for easygoing renters include air conditioning, on-site laundry facilities, on-site retail, coffee shops and eateries, proximity to public transportation, as well as 24-hour access control and security.

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Foreshore Place’s 10 residential floors include both studios and one and two bedroom apartments, ranging in price from R1.1 million to R4.2 million.

Investment key to prevent urban decay

Foreshore Place will be part of the Foreshore Precinct, a hub designed to attract new investment and bring residents and office workers back to the CBD. The Precinct will be home to the new Cape Station Project, a 3,085-bed student housing project with a world-class public plaza.

“Cape Town is currently facing a shortage of student housing, and this new development will provide much-needed housing for these students, as well as foot traffic to shops in the area,” said Adriaansen.

Interesting to note is that both Foreshore Place and The Station Project fall under the Urban Development Zone (UDZ). “This means that if you buy five apartments in a UDZ zone, for example, you can recover 55% of the purchase price in 20 years,” she said.

Student housing

South African Student Accommodation Impact Investments, an investment platform managed by Eris Property Group, recently raised R400 million to increase its committed capital to over R1.2 billion.

The platform, South African Student Accommodation Impact Investments (SASAII), can now initiate new projects that, once developed, will provide beds to more than 12,000 students in tertiary institutions across the country.

Completed in November 2019, the platform’s first investment units at Park in Hatfield, Pretoria, was a 988-bed student housing facility developed and managed by Eris Property Group.

The new projects under construction are Units on Jorissen in Braamfontein, Johannesburg, targeting Wits University with 1,071 beds, and Units at Cape Station in Cape Town CBD, which targets the Cape Peninsula University of Technology and surrounding academic institutions with 3,085 beds.

Both projects will start in the 2024 academic year.


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