The Cape Town CBD attracted development investments of more than R9 billion, according to the City Central Improvement District (CCID).
Image: Supplied
Investor confidence in the Cape Town CBD soared in 2024/25, with the total value of property development exceeding R9.031 billion, a significant jump from the R7.285 billion recorded in 2023. This is one of the headline findings of the State of Cape Town Central City Report 2024. A Year in Review (SCCR), published annually by the Cape Town Central City Improvement District (CCID).
Now in its 13th edition, the report reveals a vibrant, high-growth urban economy that is bucking national trends and attracting serious investor interest. With an official property valuation of R42.5 billion and over R4 billion in new developments already in planning, Cape Town’s City Centre is positioning itself as a premier destination for long-term capital growth and property-driven income opportunities.
The 2024/25 period saw a total of 27 developments in the Cape Town CBD: five completed projects worth over R1.02 billion, 11 under construction valued at R3.93 billion, and eight in the planning phase with a combined worth exceeding R4.08 billion. Two projects were proposed and one was on hold. Residential properties led the way, making up 44% of all new developments, followed by a growing number of mixed-use buildings, reflecting sustained demand for inner-city living.
Luxury hospitality is also making its mark. Two new high-rise hotels, Mama Shelter Cape Town and One on Bree, are currently under construction within mixed-use developments and are expected to strengthen the city’s position as a year-round destination for both leisure and business travellers.
According to Rob Kane, chairperson of the CCID and CEO of Boxwood Property Fund, the size and scope of recent developments underscore growing investor confidence. “All the big players in property development are prepared to invest in the Cape Town CBD,” said Kane. “We’re seeing increased interest from both national and international investors. More buildings mean more people, which translates into a vibrant, thriving urban economy.”
Chief Economist Paul Court posed the question: "Cape Town's economy Oasis or Mirage?" To this, he answered: “Cape Town's economic outperformance is no mirage, the report has shown a number of statistical points attest to this…however…its further growth remains constrained.
"For there to be an oasis there needs to be a desert. In this sense, Cape Town's economy is an oasis among the country's urban economies, but its ability to reach its full potential as a leading global city will hinge on a number of important developments.
"From the City's side this includes large investments in infrastructure; reducing red tape and possible devolution of services. What is less debatable is that Cape Town's CBD stands out distinctly among other South African CBDs, at a time when traditional CBDs are falling into obscurity, Cape Town's CBD continues to drive employment, attract investment, and remain an attractive place to live and work, in no small way due to the sterling efforts of our hosts here today.”
Eddie Andrews, Deputy Mayor and Mayoral Committee Member for Spatial Planning and Environment, highlighted the scale of this growth: “Total investment in the CBD from the private sector has just surpassed R9 billion. I’ve now challenged the CEO and manager for next year to aim even higher, perhaps around R10 billion.”
He noted that the city’s own infrastructure investment plays a complementary role. “At some stage, the city's capital investment, particularly in infrastructure, can be slightly different, so we aim to be enabling for private investors. But overall, this demonstrates massive investment confidence and a response to the trends we’re seeing in the CBD, where office space is increasingly being repurposed for residential use.”
The transformation is also bringing new vibrancy to the area. “The CBD is becoming a lot more vibrant. Action is important, and now, when tourists visit, they see our eateries and other properties in the evening complemented by a residential component. It’s interactive, and that’s what excites us about the prospects for the CBD,” Andrews said.
He added that the benefits extend beyond businesses and visitors. “When you have such massive investment, you create far more employment opportunities. All those commercial tenants draw visitors to local eateries and utilise existing facilities. So the local community benefits not only from employment but also from investment and support to these sectors.”
Andrews emphasised that the city is closely monitoring market trends. “It depends on market forces; the market trends will tell us exactly what happens. From our side, we’re focused on being enabling and responding to those trends now.”
The report reflects a strong performance across key business sectors, with 11 of 18 industries recording growth in 2024. The CBD is now home to 3,290 business entities, led by robust activity in the legal and medical sectors. Growth was also recorded in finance, investment, insurance, communications, education, property, co-working spaces, and diplomatic missions.
Retail remains a vital component of the city’s economic mix. In 2024, 18 new retail outlets opened, pushing the total number to 1,323. According to the CCID’s quarterly Business Confidence Index, 91% of retailers surveyed expressed satisfaction with current trading conditions. Total available retail space reached 274,320 m², with 257,875 m² occupied, an increase of nearly 11,000 m² from the previous year. The vacancy rate remained stable at 6%.
This growth was supported by the completion of The Mutual, a R200 million shopping development that added 7,500 m² of prime retail space, anchored by Checkers and Mr Price.
The office market also showed signs of continued recovery. Vacancy rates fell to 9.4%, improving on 2023’s 10.2% and down significantly from 16.1% in 2021. The CBD retains the largest share of office space in Cape Town, accounting for 40% of total stock as measured by SAPOA.
The SCCR provides an in-depth view of the inner city’s performance, featuring an interactive property investment map, trends in residential and commercial development, and insights into Cape Town’s tourism and cruise sectors. It also examines the unique dynamics across the four precincts that make up the CCID’s 1.6 km² footprint.
Despite national economic headwinds, the Cape Town CBD continues to prove its resilience. With major developments underway, strong business confidence, and expanding retail and tourism sectors, the inner city is not just recovering, it’s thriving. For investors looking to capitalise on urban growth, Cape Town’s CBD presents a compelling case for smart, strategic investment with strong upside potential.
tracy-lynn.ruiters@inl.co.za