Future is green building, student housing, mixed-use
THIS year has been a vibrant one for commercial property in Cape Town, with a number of trends sweeping across sectors and cementing their places in the market.
If one has to pick out the game changers in the city, and the country, green buildings, student housing, mixed-use precincts, CBD rejuvenation and commercial-to-residential property conversions stand out.
The impact of e-commerce on bricks-and-mortar retail and of technology on office accommodation are also two significant and fast-growing trends.
The sale this year of the old Christiaan Barnard Memorial Hospital in the CBD was a big talking point, and its transformation holds enormous promise for the city. In addition to creating significant job opportunities, the property could greatly benefit the city centre if transformed into a mixed-use development incorporating retail, residential, parking and offices. These precincts are changing the face of working and living nodes across the country, with developments like Rabie Property Group’s Century City setting the benchmark. Harbour Arch, which is being developed by the Amdec Group, is also set to encapsulate the mixed-use precinct lifestyle.
The past year has also been a boom for Cape Town’s hospitality sector, with a number of hotels opening their doors. From affordable to luxury accommodation, these hotels also cater for “completely different niche market segments”, says Fedhasa Cape chairman Jeff Rosenberg.
“This demonstrates hoteliers are ready to accommodate all
income groups and that our city’s
doors are open for business.”
Another trend this year has been a growing demand for shared and serviced office space as more people work remotely or run their own small-to-medium-businesses. Large corporates are also turning to co-working spaces for added flexibility and affordability.
“These co-working premises are modern, high-end facilities offering a variety of workspaces ranging from a single desk to an executive suite or conference venue,” says Leon Breytenbach, national manager of the Rawson Property Group’s commercial division.
“They offer state-of-the-art services including reception, copiers, wifi and phone lines.”
Technology is also disrupting traditional retail methods with the growth of e-commerce impacting heavily on bricks-and-mortar retail property.
Possibly the biggest demand currently, in Cape Town and across the country, is for student accommodation, and investment in such property holds huge potential for private developers.
Highlighting this sector as a “hot spot” in property this year, Pam Golding Property Group chief executive Dr Andrew Golding says: “There is a severe shortage of student housing in South Africa, a trend evident in many metros in prime global cities. Flats in central blocks with excellent security, good quality finishes and a mix of tenants are highly sought-after.”
Another movement this year has been the conversion of older commercial buildings into residential accommodation. Growthpoint Properties’ Tim Irvine says developers have been converting less-desirable B and C-grade commercial buildings to meet the demand for residential property. In the Cape Town CBD this trend has been fuelled by factors including growth in night-time activity, increasing average sales prices for residential units, healthy tourism levels and densification.
The global and national drive to “go green” has also impacted the commercial property market over the past 12 months, with the Western Cape among the leaders for environmentally friendly buildings and operations. Data from the Green Building Council of South Africa reveals the province was second only to Gauteng when it comes to the number of certified green buildings in the country and Africa.
Cape Town’s water crisis has also been a huge player in 2017 trends and commercial property players have been incorporating water preservation into building development and management processes.