Cape Town sees surge in mixed-use property
ccording to the State of Cape Town Central City Report 2019 – A year in review (SCCR), new commercial property developments in the Mother City’s central city worth almost R600m were completed in 2019 while investors continued to pour billions more into South Africa’s most economically successful CBD. This was one of the key findings of the economic report, published annually by the Cape Town Central City Improvement District (CTCID).
The report further says investor confidence in Cape Town’s downtown was on the rebound last year despite challenges such as the drought, electricity crisis and a tight economy.
This bodes well for 2020 in the face of devastation caused by the pandemic and lockdown regulations on the local, national and global economy.
The eighth edition of the report – detailing the economic performance, indicators and trends over the course of last year – reveals that the total value of all property investment (not only commercial) in the CBD in 2019 was R13,8bn. The overall official nominal value of all property in the Cape Town CBD according to the City of Cape Town’s 2018/2019 property evaluation is R441,2bn.
In 2019, commercial developments completed in the Central City include four hotels, and two five-star boutique hotels.
In line with global mixed-use commercial and residential development trends, is the city’s Absa building currently being redeveloped into Foreshore Place. This R373m mixed-use complex will consist of 11 floors of residential units above 15 floors of commercial space with retail outlets on the ground floor.
In 2019, two mixed-use developments were completed in the CBD, namely the R400m Halyard and UrbanOn Bree, with at least six under construction, including the R500m Rubik development.
This trend has seen total commercial space in the Central City decline by 38,496m during 2019 with total commercial space in the CBD totalling 1,023,527m², according to the Q4 2019 Office Vacancy Report of the South African Property Association (SAPOA).
In terms of rentals, the SCCR showed that, compared to other office nodes across the Cape metropole, the Central City had the most competitive asking rental for P-grade office space at the end of 2019, at R185m and the second most competitive asking rental at R150m in the A-grade market.
Cloudy outlook for Mother City post-pandemic
ccording to the Savills Prime Index: World Cities August 2020 report measuring the impact of Covid-19 on the world’s prime residential markets, rain is predicted for the Mother City for the remainder of 2020 with cloudy weather on the cards long term. Commenting on the outlook for major world cities, the report says that the Cape Town market specifically was already adjusting to weaker economic realities prior to the crisis, leaving a poor outlook for the rest of the year. While the long-term economic outlook is uncertain, interest rates are the lowest in nearly 50 years and prime property is well valued.
Covid-19 ushers in village life
estbrook, a gated estate in Port Elizabeth, has sold out their first of nine villages, The Ridge, with 24% of the first phase of the second village, River Dale, sold before construction started.
The completed development will comprise nine residential estates, a town centre with shops, restaurants, offices, medical facilities and health clubs, a Curro private school, and an Evergreen retirement village.
Developed by the Amdec Group, Westbrook is one of Port Elizabeth’s largest and fastest growing multigenerational lifestyle estates. It’s set on 128ha of parkland and located on Port Elizabeth’s western edge, close to retail and commercial nodes with easy access to major arterials, beaches, and the city’s central business district.
Westbrook MD Clifford Oosthuizen says, “The need for connected communities has perhaps never before been more apparent, or necessary, as the world starts to emerge from a global pandemic that forced us into social distancing, self-isolation, remote learning and working from home.
“Creating thriving communities involves more than building roads, delivering infrastructure and building houses; it’s about providing balance and sustainable environments where people can live, work and play in secure and harmonious communities.”
Instead of focussing on the physical attributes of a building, developers will now pay more attention to the principles of designing and developing services and support structures to help residents integrate, work together, self-organise, withstand and respond positively to change. This will see the rise of more multi-faceted, multi-generational developments like Westbrook emerge, according to Oosthuizen.
Multi-generational households sharing costs is how nearly one in five people in the United States and Australia live. Statistics SA says in November last year that 32.2% of homes in the property market housed multi-generational families, indicating the trend is gaining popularity here too.
This can also be attributed to rising unemployment rates and cultural customs, the high cost of living that makes it hard for young professionals to live on their own, and growing concerns about the safety and isolation of elderly relatives.