Cape Town CBD holds its own
After years of waiting patiently, businesses in Cape Town are starting to see signs of a rebounding economy – and that’s excellent news for the commercial and retail property sectors.
Moving against the national trend and overcoming the challenges of load shedding, the Mother City is experiencing above average growth and investment with both retail and office vacancies dropping.
Let’s take a look at this exciting trend as it creates a favourable landscape for Cape Town businesses in 2023 and beyond.
Cape Town: back in business
Three years after the pandemic caused an instant shut down and sent business revenues plummeting in the CBD, Cape Town has recovered and is charting a new growth path for the future.
The Cape Town Central City Improvement District (CCID), the organisation responsible for inner city improvement and security, recently surveyed commercial tenants in the downtown area. The results should give business people and commercial property owners in the city cause for optimism.
There are currently 1 243 retailers in the CBD, marking an increase over the 1 237 present before the pandemic.
The majority of these business owners are optimistic about their chances of success in the current commercial environment, with many of them planning to increase the size of their staff.
Office vacancies are showing a similarly positive trend, falling from 16.1% in 2021 to 13.3% at the end of 2022. This trend is set to continue as the CBD continues to draw new tenants amid an economic bounce back for the Mother City.
Keeping the lights on despite the ongoing Eskom crisis is essential for business. The CBD is relatively protected from the effects of power cuts since many parts of it are not subject to regular load shedding, and this major advantage may explain some of the optimism expressed in the CCID survey results.
Cape Town’s fast progress in securing alternative sources of electricity could mean that other parts of the city will say goodbye to power cuts completely in the years to come.
Positive business sentiment, backed by tangible improvements in the electricity supply, company, results, and retail performance are setting up a virtuous cycle in the Cape Town CBD and in the city at large. This mood of optimism is in stark contrast with the doom and gloom expressed by residents and business owners in many other cities across South Africa.
The current economic outlook is a strong indication that the wave of semigration that the Western Cape has been enjoying is not likely to end anytime soon – and the latest wave of business migrants seem to be coming from beyond the country’s borders.
Digital nomads flock to the mother city
Established businesses in the Cape Town CBD are not the only tenants pushing up the demand for commercial buildings. Digital nomads – a broad category of affluent individuals that includes highly skilled professionals in the tech industry – are increasingly choosing to live and work in Cape Town.
- A recent FlexJobs poll indicates that digital nomads from the U.S. earn between $50 000 and $100 000 per year – placing these individuals in the top 5% of earners by South African standards with incomes approaching the R 2 million mark at the higher end.
- These remote-working professionals with significant earning power have become a new market for commercial building owners in the Mother City, especially those offering shared work spaces on their premises.
- Cape Town’s easy living coastal lifestyle and relatively high level of service delivery compared with other cities is encouraging visitors to turn into residents.
- Remote workers visiting the city from overseas are deciding to stay longer and take advantage of South Africa’s lower cost of living as they work remotely.
This new wave of residents is not only good for commercial buildings but also for the economy overall. The high-level tech skills they bring will be extremely welcome by local entrepreneurs and businesses as they collaborate and tap this new pool of skills in the city.
Join the ranks of Cape Town’s successful business owners with a premier commercial property
As the rising tide of economic activity in the Western Cape continues, now could be the best time to invest in a commercial property rental in Cape Town CBD.
The Commercial Space team has the experience and industry connections to secure you the best possible office space for your l budget and business needs. Contact us today to get started.
