MOTHER CITY METTLE
Inner city decay? Not everywhere — Cape Town says confidence in its inner city is just swell
The City Bowl of Cape Town appears immune to the work-from-home trend and retailers are going nowhere, judging by a business confidence survey conducted by the Cape Town Central City Improvement District.
The survey suggests that nearly 80% of the retailers surveyed in Q1 of 2023 were satisfied with current business conditions in central Cape Town, as rolling blackouts have been restricted to certain parts of the city. This has contributed to high business confidence. Not only has the number of retail outlets in the city increased, but confidence among retailers and property owners has remained high.
“This is very heartening news as it shows that Cape Town CBD retailers are innovative and resilient and that the work of the CCID, in partnership with the City of Cape Town and the SA Police Service, to ensure the CBD remains clean, safe and open for business, has been a success,” said Cape Town Central City Improvement District (CCID) CEO Tasso Evangelinos.
The recovery in the inner city’s economy is not limited to the retail sector; landlords of larger commercial buildings have reported an influx of smaller financial and tech start-ups, with a reduced number of office vacancies.
The CCID, which manages and promotes investment into Cape Town’s CBD, says there are more than 3,000 business entities in the inner city, with over 1,200 retail and entertainment sites.
“Not only is the Cape Town CBD a cultural hub, it’s a vibrant node for business tourism, the eventing industry — with conferencing facilities with a seating capacity for over 65 000 people — and the hospitality sector… in the inner city alone, there are 65 hotels, including backpacker establishments and lodges.”
By the end of last year, the number of retailers had risen to an estimated 1,243 — 147 of which are restaurants, 93 takeaways, 112 clothing and shoe stores, 41 speciality stores and 53 superettes.
The influx of new financial and digital small-scale businesses, and the success of residential conversions, have resulted in office vacancies dropping from 16.1% at the end of 2021 to 13.3% at the end of last year.
FNB’s latest Property Broker Survey, for Q4 2022, found 51% of property brokers in SA’s six major metros — Johannesburg, Tshwane, Ekurhuleni, eThekwini, Nelson Mandela Bay and the City of Cape Town — were content with the state of the market. But they said owners were offloading properties in search of more reliable utilities and municipal services.
Financial pressure was the biggest reason owners sold properties (at 31.68%), followed by “looking for more reliable utilities” (water/electricity supply).
Looking for better municipal services has become a key reason, as FNB believes varying speeds of infrastructure and services deterioration are driving this.
FNB economist John Loos has said that the noise around the “semigration” trend towards the Western Cape is becoming ever louder.
“I believe that the province is about to reap the benefits of years of ‘net inward semigration’ of skilled labour and high-income purchasing power (although the inward migration isn’t only the affluent) because the skilled and affluent drive growth and employment in a modern economy.
“I believe the province’s time has thus come to significantly outperform all the other provinces in terms of economic growth and property market performance in the coming years,” said Loos.
He said many of the Western Cape’s key municipalities have been getting it right for many years, which is why businesses and residents are likely to get a better deal there — in terms of rates and tariffs paid versus services and infrastructure received in return — than elsewhere in the country.
“And this rates, tariffs and services deal is becoming increasingly important to individuals and businesses alike, as the country’s economic stagnation heightens the financial pressure on them, and as many municipalities elsewhere reach breaking point.” BM/DM