Today, the reinvigorated Central Business District of the Mother City has gathered momentum and with space at a premium, the cityscape will soon include new versions of these impressive buildings.
Stuart Chait, Chairman of Land Equity, a South African-based privately held property investment, development and private equity company, said around 25 new skyscrapers were due to be built in the mixed-use precinct that is the Cape Town CBD over the next 36 months, with many others in planning stages.
“Historically skyscrapers were built by institutions, mostly for single tenants such as Trust Bank House (now Absa), BP Centre (now Number 1 Thibault Square), Shell House (now Atterbury House) and more,” Chait said. In the 1980s and 1990s, a wave of decentralisation hit South Africa, and new business nodes were created outside of traditional CBD’s. “The reason for this was largely traffic and parking which couldn’t be accommodated in the CBD, as it was too congested, and the parking was too expensive to build.”
In the early 1990s, crime and grime set into CBDs before a Central Improvement District was formed by the remaining landlords and the City of Cape Town, cleaning up the area and seeing a return of tenants and investors alike. As property prices have risen off a low international base, vacant high-rises have been converted to residential, hotels, A-grade office suites and retail spaces, and mixed-use has now become a major focus.
According to Chait the thinking of high-rise mixed-use buildings was not new. “New York, Sydney, London, Melbourne, Hong Kong and many other top cities have mixed-use skyscrapers, which service their retailers, hotels, offices and residential in one building. And they work very well. Also, the DTI’s incentive of a UDZ tax allowance makes it attractive for property investors, who can write off the asset over 11 years without paying any tax.’’
Chait said ongoing efforts would be made to convert the CBD to a bicycle zone, with city dwellers choosing pedal-power, Uber or scooters as their preferred modes of transport. “The city will become greener and more ergonomic. The city’s skyline will change, with new, modern architecture and a residential buzz which will fuel the retailers. New and trendy boutique hotels, and creative office space will service the thousands of millennials, who love the vibe and ambiance that the CBD offers.”
Chait predicted that retail rentals and demand would increase to be on a par or higher than the V&A Waterfront.
“Cape Town has always had the highest land values in South Africa, and with a combination of significant tourism growth, massive semigration down from Johannesburg, low interest rates, a weak rand and the demand for property as a core asset class, people have realized the many benefits of living in the CBD. Investors are also receiving excellent returns from Airbnb rentals.’’