Cape Town CBD headed for major transformation

CAPE Town’s central business district (CBD) is headed for major transformation that will add R7bn to the total value of property once major construction projects are completed by 2020.

The Central City Improvement District (CCID) says that is a conservative estimate for the increase in the value of CBD property once projects such as the Cape Town International Convention Centre expansion and the new Christiaan Barnard Memorial Hospital are completed.

The CCID is a private-public partnership that provides complementary urban management services in parts of Cape Town’s inner city.

Research released on Tuesday by property research firm by Lightstone shows that the Western Cape has had the highest number of super-luxury property sales over the 10-year period 2005-15. Gauteng was second, followed by KwaZulu Natal and then Mpumalanga.

Super-luxury properties exceed R10m in value. Lightstone says across SA, properties worth more than R10m are purchased predominantly by those in the age band of 45-54 years.

Those aged 35-44 are the second-largest group buying super-luxury properties.

During the CCID’s annual general meeting on Monday it said the city’s official property valuations had risen from just over R6bn in 2006 to close to R24bn this year.

Chief operating officer Tasso Evangelinos said at the AGM that in 2011, the collective rand value of all residential sales in the central business district was R115m. This jumped to R296m last year, despite fewer new residential developments being recorded over the period.

“We have also seen public infrastructure investment add enormous value to the CBD, from the introduction of MyCiTi, the work being done to our roads and pedestrian thoroughfares to the upgrading of the Cape Town Station, and now the rollout of broadband,” said Mr Evangelinos.

“Construction cranes are etched along our skyline. By 2020 we will conservatively see another R7bn added to the CBD, once current construction is completed on buildings such as the (convention centre) expansion and the new Christiaan Barnard Memorial Hospital — to name but a few of the developments already in progress. These, and many others that have risen in just the past few years, have transformed the landscape of our CBD,” he said.

The new multimillion-rand Netcare Christiaan Barnard Memorial Hospital is expected to open its doors in 2016. The hospital complex will have a total of 250 beds, state-of-the-art theatres, doctors’ surgeries and consulting rooms, linked retail, a gym and a parkade.

The convention centre expansion is on track to be completed in early 2017. The project, jointly funded by the city and the Western Cape provincial government, will cost about R832m. The development will see the centre doubling its capacity and its contribution to GDP.

Other developments include Tsogo Sun’s construction of two hotels on the old Tulip Hotel site valued at R680m, and the Sentinel, a R200m residential development on the corner of Loop and Leeuwen streets.

Mr Evangelinos also said the CCID and the City of Cape Town had begun to research the most viable models to optimise public space management in the CBD, in terms of infrastructure and beautification.

Francois Viruly, an independent property economist and associate professor at UCT, said the commercial property market continues to show a strong performance. Initiatives such as the CCID increased investor confidence and drove demand by users, he said.

“The returns and values of properties is determined by what happens in buildings and the broader urban environment in which they are located, ” he said.

Original artical appeared in BDLive