The past few decades have seen a tremendous transformation in Cape Town’s CBD – and the Foreshore has been at the centre of the city’s redevelopment and rejuvenation.
The ultra-modern skyline which has sprung up in the area between the old city centre and the V&A harbour area has become a symbol of a new, vibrant and inclusive Cape Town which has its eyes fixed firmly on the future.
In this article we review the future of commercial property post COVID-19 with a strong emphasis on the Foreshore and the exciting property developments that are planned for the area over the next few years.
21st century Cape Town
The Mother City’s reputation as a laid-back holiday destination and coastal retirement option has given way in recent years to a new label: South Africa’s most exciting up-and-coming urban economy.
Immigration to the Western Cape from foreign investors and South Africans previously residing in other provinces has resulted in a younger, highly skilled and decidedly entrepreneurial population.
This population shift may be a factor in the city’s ongoing success.
Cape Town currently enjoys a per capita GDP that’s more than 30% higher than the national average. The municipal economy is second only to Johannesburg in terms of size and is growing sustainably with a positive future outlook.
The Foreshore, which has developed tremendously in the past two decades, is in many ways a symbol of modern Cape Town.
Clean, safe, and home to some of the most successful companies in the city, it has become popular among small, medium and large enterprises alike.
After the pandemic ends this area is likely to bounce back strongly. The Foreshore’s excellent infrastructure and proximity to both the city centre and the V&A are set to drive demand for office units in its cutting-edge buildings.
Foreshore by the numbers
- The Cape Town CBD had R13.83 billion worth of property investments in 2019, many of which are located in the Foreshore region.
- Several large construction projects including the R15 billion Harbour Arch, The Rockfeller and Foreshore Place promise to dwarf the existing investment in the CBD in the years to come and create thousands of jobs in the process.
- The Foreshore’s gross commercial property rentals range between R91/m2 to almost R190/m2 on a continuum from C-grade to A+-grade premises.
- The current vacancy rate of 6.3% in the CBD is the lowest of any SA city and bodes well for a post-COVID recovery as the economy returns to normal in the short to medium term.
Despite the current dip in demand for office space in the wake of the corona virus pandemic, the sheer magnitude of investment in Cape Town’s Foreshore and the success of existing projects in the area bode extremely well for the future.
A business hub in SA’s most promising commercial city
The recent surge in investment activity in the greater Cape Town area is no coincidence. It speaks to the confidence that developers and financiers have in an urban area that is growing, innovating and becoming more affluent with each passing year.
The Mother City’s unique location, world-famous natural beauty and relatively stable governance have produced an attractive prospect for foreign and local investors.
As time goes by, continued stability and success are compounding Cape Town’s desirability as a business destination – and the trend is likely to continue long after COVID is gone and forgotten.
Cape Town’s Foreshore has benefited hugely from the overall surge in economic development that the Western Cape (and Cape Town in particular) has enjoyed over the past decade or so. The following positive features of the city make it an ideal investment destination with the potential to grow sustainably in the long term.
- The city’s population has increased from just over 3.8 million in 2013 to 4.3 million today. With 2.9 million working-age residents, Cape Town is poised for growth in the decades to come. (State of Cape Town Central City Report 2019)
- High levels of investment and entrepreneurship (especially in the digital and tech sectors) and good infrastructure and municipal services have given the city a distinct edge over other metros.
- Trade and business infrastructure continues to develop, with Cape Town now having the second busiest container port and airport in South Africa.
- Cape Town is home to three major universities including UCT which is the highest ranked academic institution in Africa. This provides numerous opportunities for R&D collaboration while ensuring a steady stream of skilled workers and budding entrepreneurs.
Statistics can never truly capture the experience of living and working in a city – but the explosion in residential and commercial property developments over the past 15 years is proof that investors have confidence in Cape Town both today and for the future.
Stunning natural beauty, proximity to the West Coast and Cape Winelands, a strong sense of community, and highly active local business organisations like the Cape Chamber of Commerce all come together to produce an attractive business environment.
Looking to the future together
2020 has been an incredibly challenging year for the entire planet. Capetonians have taken the pandemic in their stride.
Showing the same resolve as it did when facing Day Zero, loadshedding, and the political roller coaster that state capture brought in its wake earlier in the decade, Cape Town has proven itself to be a city for all seasons.
Present challenges aside, there is bound to come a day when the pandemic ends, the economy rebounds sustainably, and business activity returns to pre-pandemic levels.
When things return to normal – albeit a new normal – the Foreshore’s standout features will put it in an excellent position to grow and prosper once again.
If you’d like to take advantage of the current economy and purchase or rent a high-quality commercial space in the Foreshore, our team would love to assist you.
To view our portfolio of premier office units in the Cape Town area – including several new Foreshore buildings – contact us today.