Rush on property

2015-06-09 06:00
Development has not stopped with the completion of Cape Town’s tallest building, Portside, with property investment in the CBD growing by R1.95bn the past three months.

Development has not stopped with the completion of Cape Town’s tallest building, Portside, with property investment in the CBD growing by R1.95bn the past three months.

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Investment in the CBD has grown by R1.95bn in just the past three months.

This was announced last week by Rob Kane, chairperson of the Cape Town Central City Improvement District (CCID), at a business breakfast. And even more money is expected to roll in, as experts hint at a residential property boom around the corner.

Each year, the CCID releases a report on the state of the central city, which tracks development and investment in the CBD.

In compiling this year’s report, the team found R1.46bn worth of development was underway or on the cards during the year period. Since the release of that report, a R70m upgrade by the department of public works to the Master of the High Court building in Albertus Street, a new R200m residential development called The Sentinel on the corner of Loop and Leeuwen streets, the R680m development of the SunSquare and StayEasy hotels on the site of the old Tulip Hotel in Bree Street, and the transformation of the old Triangle House in Riebeek Street into a R1bn residential and hotel development have been confirmed.

Boom time“A year ago, we predicted that residential property would be the new wave of development, and we are thrilled in particular to see this happening as demand has significantly now outstripped supply in the central city,” Kane says.

This trend was confirmed by consultant and associate professor of Urban Economics, Property Development and Land Markets at UCT Francois Viruly. The property market has been shown to run on a roughly 20-year-long cycle, he explains, each of which brings a boom associated with a social catalyst.

Cape Town saw a boom in the 1960s as a result of industrialisation, one in the 1980s as cars became popular and saw homeowners moving further from the CBD, and again in the mid-2000s due to an increased GDP, Viruly says.

“However, now the cycle has come full circle: New residential development is now not only in demand but construction has begun, much of it looking at converting underutilised B-grade office space into residential – which, in turn, will no doubt also have an impact overall on available office space currently existing,” he says.

The next property cycle will be driven by public transport and the desire by households to live in often smaller residential units that offer good access to work, play and educational facilities, Viruly explains.

“Public transport is going to be a game changer,” he says.

International trendThe next property boom could start as soon as 2018, he predicts.

This boom will be centred on residential property, following international trends to live in downtown areas, Viruly says.

“Two-thirds of South Africa is urbanised,” he says. “The national treasury is taking cities very seriously at the moment.”

Kane adds: “We think that people wanting to live here and be closer to their places of work and play is the biggest thumbs-up any CBD can receive.”

Investment in the CBD has grown by R1.95bn in just the past three months.

This was announced last week by Rob Kane, chairperson of the Cape Town Central City Improvement District (CCID), at a business breakfast.

And even more money is expected to roll in, as experts hint at a residential property boom around the corner.

The CCID gives an annual report on the development and investment in the CBD.

In compiling this year’s report, the team found R1.46bn worth of development was on the cards during the year period.

Since the release of that report, a R70m upgrade by the department of public works to the Master of the High Court building in Albertus Street, a new R200m residential development called The Sentinel on the corner of Loop and Leeuwen streets, the R680m development of the SunSquare and StayEasy hotels on the site of the old Tulip Hotel in Bree Street, and the transformation of the old Triangle House in Riebeek Street into a R1bn residential and hotel development have been confirmed.

Boom time“A year ago, we predicted that residential property would be the new wave of development, and we are thrilled in particular to see this happening as demand has significantly now outstripped supply in the central city,” Kane says.

This trend was confirmed by consultant and associate professor of Urban Economics, Property Development and Land Markets at UCT Francois Viruly.

The property market has been shown to run on a roughly 20-year-long cycle, he explains, each of which brings a boom associated with a social catalyst.

Cape Town saw a boom in the 1960s as a result of industrialisation, one in the 1980s as cars became popular and saw homeowners moving further from the CBD, and again in the mid-2000s due to an increased GDP, Viruly says.

“However, now the cycle has come full circle: New residential development is now not only in demand but construction has begun, much of it looking at converting underutilised B-grade office space into residential – which, in turn, will no doubt also have an impact overall on available office space currently existing,” he says.

The next property cycle will be driven by public transport and the desire by households to live in often smaller residential units that offer good access to work, play and educational facilities, Viruly explains.

“Public transport is going to be a game changer,” he says.

International trendThe next property boom could start as soon as 2018, he predicts.

This boom will be centred on residential property, following international trends to live in downtown areas, Viruly says.

“Two-thirds of South Africa is urbanised,” he says. “The national treasury is taking cities very seriously at the moment.”

Kane adds: “We think that people wanting to live here and be closer to their places of work and play is the biggest thumbs-up any CBD can receive.”

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