Location, location, location

It appears that the Western Cape has already decoupled from the rest of the country’s stagnating property markets. House prices were up an average 6.18% in the province in the fourth quarter, compared with a measly 0.54% and 1.62% in Gauteng and KwaZulu-Natal, according to research and analytics group Lightstone.

The province’s retail, commercial and hospitality property sectors are also outperforming on key trading metrics. In fact, JSE-listed real estate investment trusts such as Growthpoint, Redefine and Hyprop are starting to run out of office, retail and industrial space in Cape Town and surrounds as more corporates, retailers and manufacturers join the relocation wave.

Property investors and developers are responding by pouring billions of rand into new projects. Growthpoint and the Government Employees Pension Fund, which coown the V&A Waterfront, plan to invest about R20bn to double the precinct’s footprint over the next 10 to 15 years.

Estienne de Klerk, head of Growthpoint’s South African business, says the V&A is virtually fully let thanks to a “phenomenal” post-pandemic rebound in visitor numbers.

In December, a record 3-million people streamed through the V&A, up 25% year on year, while retail sales surged by 16% to reach a record monthly high of R1.2bn. The occupancy at the precinct’s 12 hotels touched 90% over the same period.

In Cape Town’s city centre, 22 new building projects worth an estimated R3.5bn are under way or in the pipeline, most of which are high-rise apartment blocks. That will bring at least another 1,500 apartments to the market, on top of the 2,500 units already completed since mid-2021, according to the Cape Town Central City Improvement District (CCID).

Notable developments include Harbour Arch on the Foreshore, One Thibault Square, a redevelopment of the old BP Centre near St George’s Mall, The Rubik, The Barracks, 84 Harrington and The Fynbos, Africa’s first biophilic building. Some developments are already sold out.

CCID chair Rob Kane says inner-city living has been underpinned by a steady return of office workers, digital nomads and international tourists.

“The city continues to position itself as a vibrant live, work, play and shopping hub,” he adds. “More restaurants are staying open at night, while retailers, including all major grocers, are also back.”