Tag Archive for: Metro

Andrew Stegmann
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2019 State of Cape Town Central City Report Launched

Published recently, by the Cape Town Central City Improvement District (CCID), the report noted that the Central City “held its own quite remarkably” in the year under review, despite 2019 being “incredibly difficult”, according to CCID board chairperson Rob Kane.

Says Kane: “Stakeholders and investors in the CBD have had to cope with the aftermath of the 2018 drought and subsequent water crisis, ongoing load shedding and a tough economic climate.”

Five-part section on on ‘Surviving Covid-19’

Though the coronavirus pandemic falls beyond the ambit of the SCCR report, a five-part section of the report is devoted to reflections on “Surviving Covid-19” by Wesgro CEO Tim Harris, Economic Development Partnership CEO Andrew Boraine, HTI Consulting CEO Wayne Troughton and economist Brian Kantor of Investec Wealth and Investment and Arthur Kamp, chief economist, Sanlam Investments.

Kane acknowledges the “global devastation” Covid-19 has caused, noting that it “has damaged the Central City’s economy”, but its economic performance means the Central City is well-placed to navigate a path to recovery.

Property evaluation

The SCCR report shows that, according to the City of Cape Town’s 2018/2019 property evaluation, the value of Central City property stands at R44.124bn, and that the total value of property investments in the Central City – recently completed, under construction, proposed or planned – is R13.83bn.

This is broken down into:

  • R1,045,000,000 – A conservative estimate of the value of property completed in the Central City during 2019 but which still has to be officially assessed by the City of Cape Town (seven projects);
  • R3,730,000,000 – The value of property, conservatively estimated, that is under construction (14 projects);
  • R5,196,000,000 – The value of property, conservatively estimated, that is currently in the planning phase (11 projects); and
  • R3,860,000,000 – The value of property, conservatively estimated, that is currently proposed and is expected to begin construction within the next two years (six projects).

The Foreshore precinct has emerged as a key property investment node which is due, in part, to the expansion in 2018 of the Cape Town International Convention Centre (CTICC), which achieved a turnover of R277m in 2018/2019. “This world-class venue, which contributed R4.5bn to the Western Cape GGP, was a key driver in 2019 of the Central City’s visitor economy as well as its knowledge and eventing economy, all of which continued to expand in 2019.”

The eighth edition of the SCCR reflects on the bigger picture of the economy of the Central City, looking at property trends, occupancy rates of commercial and residential buildings, retail vacancies, the prominent economies of the Central City and trends in commercial and residential markets.

Among other key findings in the report are that:

For the third consecutive year, Cape Town had the lowest overall vacancy rate of 7. % of the country’s five largest metros. According to the SAPOA Office Vacancy Report (Q4 2019), the city’s vacancy rate compares very favourably to that of Johannesburg (12.5%) and is well below the national office vacancy rate of 11%.

The Central City vacancy rate has continued its gradual decline from a peak of 11.8% at the end of 2018 to 10.8% at the end of 2019 – a decline of 15,127m2 of space available for rent. This is at least partially attributable to the reduction in office space due to redevelopment during 2019.

A new urbanism trend gained traction in South Africa in 2019 in spite of a sluggish housing market, increasing demand for downtown living in the Central City. This has prompted the re-imagining of precincts in the Central City by developers into spaces where homeowners can live, work and play in areas that provide a safe and secure environment with easy access to work. With affordability a major issue for many young professionals, developers are responding with a growing number of studio apartments and co-living units within mixed-use developments. In 2019, small apartments with shared amenities officially became hot property, giving first-time buyers the opportunity to enter the housing market in a desirable city centre.

In 2019, the Central City residential market finally felt the effects of the economic and political headwinds which have dampened activity in the national and regional housing markets in recent years. The distribution of sales across the various price bands was similar to that seen in 2018, with the largest number of sales recorded in the R30,000 – R39,000/m2 category. No sales were recorded in the top price bracket (more than R60,000/m2) last year, while two sales were recorded in 2018.

The report includes separate sections providing a detailed look at key elements of the Central City economy, including:

  • The Art Economy: With Cape Town firmly established as the art capital of Africa, the financial contribution of the creative sector to the Central City economy is undeniable;
  • The Visitor Economy: With three new hotels opening in the Central City in 2019, several mixed-use developments and aparthotels either being constructed or in the pipeline, the CBD’s multi-layered visitor economy continued to expand in spite of a tight economy;
  • The Night-time Economy: There is growing awareness of the potential of the Central City’s night-time economy, but it remains an unexplored resource. A recent research partnership between the City of Cape Town, the CCID and the University of Cape Town will provide a better understanding of the night-time economy of the Central City and how to better use the night as a resource for social and economic development; and
  • The Knowledge and Eventing Economy: The Central City’s knowledge and eventing economy continues to expand every year, driving business into the region as local and international visitors and business tourists stream into the CBD to attend official events and conventions in and around the public spaces in downtown Cape Town.

The report also features a detailed analysis of residential and commercial rentals, and highlights from the CCID’s residential and retail surveys.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

Cape Town is the SA Metro with the Highest Prices Paid for Residential Property This Past Year

For the 12-month period to end November, Cape Town topped R21.75bn in residential property transactions at an average transaction value of R2.2m. The metro also scooped the highest prices paid for residential property in the country this year according to Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl.

Comparatively, Pretoria metro reached around R17bn (with an average of R1.2m), Sandton R13.4bn (with an average of R2.3m), Johannesburg R13bn (with an average of R1.483m) and Durban R6.4bn (with an average of just over R1m).

The wealthy might not be buying as much as they used to, but Cape Town still tops their list of most desirable property, says Levin. Atlantic Seaboard and City Bowl sales amount to R4.3bn including 30 of the highest prices paid.

The rental market has also performed exceptionally despite the headwinds. Seeff has concluded rentals of up to R170,000 per month in Fresnaye, R130,000 at the Waterfront, R120,000 in Bantry Bay and R60,000 permonth in Tamboerskloof in the City Bowl. Holiday rentals this summer is expected to reach R100,000-R250,000 per night in Clifton.

Semigration buyers back

Semigration buyers are back and Levin says that sales are often delayed only by the slow sales cycles in Gauteng and other inland provinces. Foreign buyers too have invested over R500m in property with the highest demand from German, UK and US buyers.

Cape Town achieved about 50 high-value sales priced from R20m-R60m compared to just two in the upper end of Sandton/Johannesburg and a highest price of R23m.

The highest prices paid include: R60m in Fresnaye, R58.5m in Bantry Bay, R47m in Bishopscourt, R45m in Clifton, R39m in Higgovale, R36.5m in Llandudno, R36m in Camps Bay, R34m in Constantia Upper and R32m in Mouille Point. We are likely to see a few more high value sales over the summer, says Levin further.

Notable too, is that nine of the top 10 suburbs in the country are now in Cape Town, up from seven about three years ago. These all now boast a median price of over R10m and over R20m for Clifton, says Levin. Only Sandhurst in Sandton/Johannesburg is included in the top 10 ranking:

Southern Suburbs

The Southern Suburbs enjoyed an active year and is not just home to two of the top suburbs in the country but offers a high concentration of top performing schools which drives demand, says James Lewis, managing director for Seeff Southern Suburbs, Hout Bay and Llandudno.

Total sales of almost R4.5bn has been achieved including six high-value properties ranging to R34m in Constantia and R47.5m in Bishopscourt. Although the sub-R10m price band dominated, the ‘Uppers’ such as Claremont and Kenilworth have attracted prices of up to R20m (Claremont) while Newlands achieved eight sales above R10m, and Rondebosch achieved a further six.

The Southern Suburbs rental market has been a top achieving sector this year, says Lewis. Student rentals and young professionals kept the sectional title rental agents busy while upper-end family tenants paid up to R80,000-R100,000 per month in top-end areas such as Constantia.

Crowning another year of top accolades, Cape Town was voted best city in the world for the seventh successive year by the UK’s Telegraph Newspaper. The Cape has lost none of its sparkle says Mr Levin. It is the second wealthiest city in the country and upper-end buyers will spend 100%-200% on average more on real estate purchases on the Atlantic Seaboard compared to anywhere elsewhere.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].