A foothold into Cape Town
TOWER BLOCK: NEW DEVELOPMENT OFFERED BY CITY ON 99-YEAR-LEASE NEXT WEEK
Century City site will be sold at the High Street auction.
A25 000 square metre bulk Tower Block development lease opportunity next to Cape Town’s International Convention Centre (CTICC) is going under the hammer next Thursday. The development is at the heart of a booming R40 billion oceanside investment corridor being developed in the Mother City.
The scale of investment in this small five square kilometre strip arguably makes it the most exciting and vibrant development node in South Africa, says High Street Auctions director Greg Dart, and an area that private equity investors can’t ignore.
“Big groups such as Amdec and the V&A Waterfront are dominating the latest development drive in the narrow strip of seafront acreage that is to all intents and purposes the only remaining greenfields land in the immediate vicinity of Cape Town’s central business district.
“These companies have sunk billions of rands into the area, because they recognise its value.
“If that isn’t a banner headline for developers to fight for the City of Cape Town’s 99-year Tower Block development lease when High Street takes it to auction at the DHL Stadium in Green Point, I don’t know what is.”
Dart says it wouldn’t be an understatement to call Cape Town’s foreshore and immediate surrounds the holy grail of South African real estate locations because the 5km² under discussion ticks every development value box, including:
Being the undisputed hub of Cape Town’s multimillion-rand business tourism industry. This is anchored by the world-class CTICC and its cluster of luxury hotels and surrounding amenities that include the Christiaan Barnard Hospital, the Artscape Theatre Centre and fine dining restaurants.
The CTICC business tourism hub located near the V&A Waterfront.
The Waterfront itself being a global visitor attraction and South Africa’s most popular tourist destination, with a footfall of 24 million a year.
Growing status for offering the most attractive, modern and practical mixeduse developments, in line with universal demand for live, work and play communities that deliver in every respect.
High Street associate director Shawn van Jaarsveld says the area’s investment potential has grown exponentially since 2000 and now appears to be reaching terminal velocity.
“The latest surge started with the Yacht Club. After Amdec completed the R1.5 billion mixed-use development in Roggebaai five years ago, the group began to roll out an ambitious R15 billion plan for a six-tower precinct called Harbour Arch on what was hitherto 5.8 hectare of wasteland at Culemborg on the eastern edge of the foreshore.
“In mid-2023 Tower One, which was fully financed by Absa Bank, was taken to market. Amdec sets the value of the 80 000m² build at about R2.4 billion, which includes 560 apartments, restaurants, retail spaces and more than 1 000 parking bays.
“The apartments’ launch prices were between R2.1 million and R8 million.”
Van Jaarsveld says Cape Town Central City Improvement District figures note that between 2014 and 2017, more than R5 billion was invested in various foreshore developments.
“What we’ve been seeing of late, though, is single developers committing triple, or even quadruple, that amount to projects that will forever change the skyline of that narrow oceanfront corridor between Culemborg and Granger Bay.
“After Harbour Arch’s launch came the City of Cape Town’s announcement that it would auction a 99-year-lease for a 25 000m² bulk Tower Block development, nestled in the foreshore precinct, adjacent to the CTICC.
“Shortly after that, the Waterfront said it hoped to start rolling out a R20 billion development plan next year, and was in the process of applying for an additional 440 000m² in development rights across its footprint, with most of the new builds planned for Granger Bay.
“Developments on this scale bode extremely well for the ongoing success of the area. It’s already thriving, and with all this new development the only way is up.”
High Street Auctions managing director James Dall says the Tower Block development site is of critical importance to developers looking to capitalise on Cape Town’s thriving economy and rapidly expanding tourism industry.
“The foreshore’s greenfields development opportunities are rapidly disappearing. Land is scarce, and finding a willing seller, even harder.
“The initial lease period is 60 years, with a 20-year renewal opportunity followed by an additional 19-year optional extension.
“Cumulatively, the total lease option is 99 years.”
Dall says he believes by virtue of the location, hospitality companies should be at the head of the auction bidding queue.
“Those visionary entrepreneurs who could pull off a next-level luxury apart-hotel offering 24-hour concierge services, valet parking, limos on demand, personal shoppers on call – basically the whole nine yards – should also be jostling right alongside them, because it’d be a unique offering in the area.”
The foreshore Tower Block lease will be one of two substantial City of Cape Town development opportunities going under the hammer at DHL Stadium in Green Point starting at noon next Thursday.
The second is a sale of one of the few remaining development sites in the Century City precinct with GB3 zoning and permissible bulk of approximately 25 000m².
The Century City site is in the proximity of mixed-use developments combining office, retail, residential and leisure components in an integrated, stimulating and aesthetically pleasing urban environment.
The city’s MMC for economic growth James Vos said: “These sites form part of the city’s property disposal pipeline to unlock private sector-led development opportunities.
“It will certainly have a ripple effect that will boost Cape Town’s local economy, creating jobs and contributing significantly to the metro’s gross domestic product.
“The proceeds from these transactions will be used for service delivery and related infrastructure investment across the city.”
“It will be a hybrid live and digital livestream auction, with bids in rands accepted in real time from the room and from online bidders around the world.
Opportunities are rapidly disappearing