Surge in investor confidence boosts Cape Town CBD property development values to R9.031 billion

In a remarkable display of resilience and growth, investor confidence in Cape Town's Central Business District (CBD) has surged in 2024/25, with property development values leapfrogging to an impressive R9.031 billion.

This significant increase from the R7.285 billion recorded in the previous year is detailed in the annual State of Cape Town Central City Report 2024: A Year in Review (SCCR), published by the Cape Town Central City Improvement District (CCID). Now in its 13th edition, the report highlights a vibrant urban economy remarkably thriving amidst broader national economic challenges, reaffirming the CBD's status as a leading destination for long-term investment.

The total property valuation of Cape Town's city centre stands at R42.5 billion, with over R4 billion in new developments currently in planning. The promise of capital growth and lucrative property-driven income opportunities is drawing both local and international investors eager to tap into the bustling market. The data reveals  27 developments shaping the landscape of the CBD, including five completed projects worth over R1.02 billion, 11 under construction valued at R3.93 billion, and eight in the planning stages with a collective worth exceeding R4.08 billion.

Residential properties are at the forefront of this transformative growth, constituting 44% of all new developments, alongside a rising share of mixed-use buildings that cater to the increasing demand for inner-city living. Notably, two high-profile luxury hotels, Mama Shelter Cape Town and One on Bree, are under construction within these mixed-use developments, reinforcing the city’s appeal as a year-round destination for leisure and business tourism. As Rob Kane, chairperson of the CCID and CEO of Boxwood Property Fund, aptly notes, “All the big players in property development are prepared to invest in the Cape Town CBD.  More buildings mean more people, which translates into a vibrant, thriving urban economy.”

Economic activity in the CBD is robust, with 11 out of 18 sectors reporting growth in 2024. The area is now home to 3,290 business entities, with the legal and medical sectors leading the charge followed by notable growth in finance, investment, insurance, and communications, among others. The retail sector remains integral to the economy, with 18 new outlets launched in 2024, raising the total to 1,323. A recent CCID survey revealed that an impressive 91% of retailers expressed satisfaction with prevailing trading conditions. The total available retail space reached 274,320 m², with 257,875 m² occupied, reflecting a robust growth of nearly 11,000 m² from the previous year, and a stable vacancy rate of 6%.

The newly completed R200 million shopping development, The Mutual, has contributed significantly by adding 7,500 m² of prime retail space, anchored by well-known brands like Checkers and Mr Price. In tandem, the office market is also witnessing a positive trajectory; vacancy rates have decreased to 9.4%, down from 10.2% in 2023 and markedly improving from 16.1% in 2021. The CBD retains a commanding 40% share of Cape Town's total office space stock as assessed by SAPOA.

The SCCR presents an expansive overview of the inner city’s performance, featuring an interactive property investment map, insights into tourism trends, and the dynamic nature of the four precincts within the CCID’s 1.6 km² footprint. Despite facing national economic headwinds, the resilience of the Cape Town CBD is palpable. With major developments on the horizon, buoyant business confidence, and expanding retail and tourism sectors, the inner city is not simply recovering; it is flourishing. For discerning investors eyeing urban growth, the Cape Town CBD offers a compelling and strategic investment opportunity with significant upside potential.