Investment in Cape Town CBD over R1b.

Posted On Wednesday, 22 January 2003 10:01 Published by
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Investment levels in Cape Town's Central Business District (CBD) had exceeded 1.0 billion rand for the 2002 calendar year.
By Lynn Bolin

Investment levels in Cape Town's Central Business District (CBD) had exceeded 1.0 billion rand for the 2002 calendar year, the Cape Town Partnership and Cape Town mayor Nomainda Mfekto announced at a joint press conference.

The result of 1.1035 billion rand in investment - 88% from domestic sources and 12% from foreign direct investment (FDI) - surpassed the Partnership's own target of 1.0 billion rand for the year, with investments in the City now having doubled to a cumulative total of some 9.0 billion (either planned or underway) since July 1999.

Partnership CEO Michael Farr said the total 2002 investment numbers were made up of the capital value of new leases (260 million rand), new developments (119 million rand), new purchases (140 million rand) and upgrades and renewals (584 million rand).

Some notable investments include the rejuvenation and upgrade of the Woolworths Precinct in the East City, the Old Naspers Building in the West City and the Adderley Park redevelopment.

Of the new developments since mid-1999, Farr explained, some 2.0 billion rand was in construction, sustaining over 12,000 jobs over three years, 4,000 of which were associated with the new Convention Centre on the foreshore.

Indirect jobs created for the entire period since the Partnership's formation had not been calculated, but could easily double the overall job creation figures, he said.

Jobs created in the retail and leisure industries had also yet to be calculated, but were estimated to be significant at about 200 retail jobs in 2002 alone.

Speaking at the press conference, Mayor Nomaindia Mfeketo said: 'This achievement would not have been possible without the full co-operation and commitment of both the public and private sectors.

'It is clear from all our research that both national and international investors look to our capital city and its success as a benchmark - a standard that motivates the consideration of investments elsewhere in the metropole.

'In that regard, the health and success of Cape Town's central city will prompt investments elsewhere and help to generate access to job opportunities throughout the metropole.'

Farr added that the Partnership was pleased to have attracted so much domestic investment, which had to be present before foreign investors could be attracted as it demonstrated confidence in the city's business conditions.

For 2003, the Partnership's investment goal would remain at 1.0 billion rand, he told the press.

'To sustain investment at the current levels is already difficult enough,' he explained.

'But we will be looking for 20% of this to come from offshore, a higher target than 2002.'

Currently two European-based companies are looking to make significant leisure-oriented investments into the CBD in 2003, both of which would include the rehabilitation of existing buildings.

At the same time, he said it was also encouraging that almost half of the investment had occurred within the historic CBD, given that so much attention had been focused on the foreshore area and the construction of the new Convention Centre.

Retail had also responded well to the improvements made in the CBD, said Farr.

In November 2000, close to 200 retail shops were vacant in the central city.

Currently only about 67 shops were vacant, a decrease in vacancies of 66.5%.

Retail research undertaken in 2001 and 2002 indicated that purchasing tendencies had risen in the CBD, with groceries increasing from 44% to 50% of respondents, and clothing up from 50% to 60%.

Demand for retail in the CBD had also risen sharply, with respondents asking for more supermarkets (28% in 2001 vs 40% in 2002), more clothing stores (18% in 2001 vs 33% in 2002), more furniture and furnishings (3% in 2001 vs 17% in 2002) and restaurants (10% in 2001 vs 30% in 2002).

Significantly, 65% of all respondents said they conducted all their personal banking in the central city versus 52% in 2001.

SA Property Owners' Association (SAPOA) Chairman Alan le Roux added: 'At the inception of the Cape Town Partnership, one of the main aims - from SAPOA's point of view - was to instil confidence in the central city of Cape Town as an investment area again.

The result to date and the level of investment is therefore tremendously exciting and more than what was expected.

'Although there is still a lot of work to be done on some key issues, we are very excited about the future possibilities in the city and there is no doubt that the partnership between the City and the private sector is a very important one that should be built on to ensure more success into the future.'

I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge

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