City centre building boom
Western Cape’s residential and commercial construction outperforms national sector
DESPITE South Africa’s gloomy economic outlook and low business confidence, Cape Town is seeing a boom in building activity in the CBD, with current and future construction projects worth billions set to boost the Western Cape’s economy and job creation.
Economic Opportunities MEC Alan Winde said the growth of the construction sector in the province outperformed national figures.
Winde said the gross area approved for residential building plans had increased by 22.5 percent in the past year compared with a9.2 percent rise nationally. He said the number of square metres approved for nonresidential building had increased by 15.5 percent over the same period, compared with 1.7 percent nationally.
“The construction sector in the province is worth R16.1 billion. Between 2010 and 2014, the sector grew by 2.2 percent yearon-year. This is compared to growth of 1.8 percent nationally over the same period.”
Janine Myburgh, the president of the Cape Chamber of Commerce and Industry, said Cape Town’s CBD was one of the country’s success stories.
She said the city centre had thrived since the 1990s. “Property values have soared and building has never stopped and I see no reason for it to stop now. The new projects will bring more people into the city and they will need more services and that means business opportunities.”
She said the building industry had experienced some lean times. Nevertheless, despite low business confidence in the country, developers would continue to be attracted to successful, well-managed areas.
Carola Koblitz, the spokeswoman for the Cape Town Central City Improvement District, said the organisation was excited about the many construction sties across the city centre.
“Not only is the construction sector extremely important in terms of job creation, it is also indicative of the confidence that investors are showing in our city’s traditional CBD.”
Koblitz said several construction sites were under way, some nearing completion, including Tsogo Sun’s R500 million SunSquare and StayEasy Hotels; Netcare’s R330m Netcare Christiaan Barnard Memorial Hospital; and the R832m expansion of the Cape Town International Convention Centre (CTICC East).
She said other new developments included Signatura’s R1bn Radisson Blu Hotel and Residences at 22 Riebeeck Street; FWJK Development’s R400m KPMG Place on the Foreshore; the Nova Group/Dogon Properties’ R200m The Sentinel at Leeuwen Street; and Kings Cross Properties R120m Twinell Building in Loop Street.
The Tsogo Sun development on the corner of Buitengracht and Strand streets will consist of two hotels, one with200 bedrooms and the other with 304.
John van Rooyen, Tsogo Sun operations director for the Cape region, said 2 700 jobs would be created during construction. A total of 250 jobs would be created once the hotel opened for business, which should happen in the third quarter of next year.
Julie-May Ellington, the chief executive of the CTICC, said the venue had turned away hundreds of potential business opportunities over the past few years.
She said the convention centre contributed over 91 000 direct and indirect jobs to the local economy, and since inception had made a cumulative contribution of R28.8bn to national GDP and R25.6bn to the economy of the Western Cape.
Ellington said the CTICC expansion will officially open in March next year.
She said the expansion would enable the convention centre to host concurrent events.
As a result of the expansion, the centre had secured the World Ophthalmology Congress, which will bring 15 000 delegates to the west and east wings in 2020.
“Our strategy is to increase capacity in order to met CTICC’s growing list of clients who want to expand their events into both buildings and other clients who we will now be able to accommodate,” she said.