Cape Town Property Market Reaches Record Valuation – Claremont and CBD Top Performers
South Africa’s commercial property market has grown substantially in value since the last official survey in 2015, now valued at around R1.9 trillion. Cape Town, which makes up a significant part of this valuation, continues to be a leading source of domestic and foreign investment, bolstered by ongoing redevelopment and a strong economic position.
In this article, we explore the latest numbers on commercial property values across the country, with a focus on the Western Cape. We look at what has enabled the province to achieve the highest commercial property values per capita in the country and highlight trends likely to help Cape Town maintain its place as the top office space destination.
R1.9 Trillion in Commercial Property Despite a Weak Economy
South Africa’s total commercial property valuation according to real estate software and data provider, Gmaven, has risen to R1.9 trillion from its previous level in 2015, painting a positive picture of the country’s commercial property landscape.
Although there’s no unified national survey of commercial property values, researchers have derived this impressive figure from municipal and tax records, as property valuations are essential for setting monthly levy rates. Examining the data closely, it’s evident that these valuations reflect varying economic conditions across regions, with a shift in value from the northern parts of the country to the Western Cape.
- Despite GDP growth falling close to zero between 2015 and 2024, the commercial property market managed an impressive 48% increase in value, with institutional property investors holding R400 billion and the remaining R1.5 trillion representing private investments.
- Considering this period includes the peak of the state capture era and the economic slowdown from Covid lockdowns, the resilience of the property market is noteworthy.
The Western Cape has outperformed other provinces both economically and in attracting foreign investment, a trend reflected in the province’s increasing share of commercial property valuations. Property values in the Western Cape have grown to R426 billion today.
This expansion, along with the recent Rode Report showing record low office vacancy rates in Cape Town, reaffirms the city as the country’s premier destination for business, investors, and commercial property buyers.
With some 7.4 million people calling the province home, the per capita commercial real estate valuation is currently R57,000 – the highest in the country after Gauteng (R53,000) and KZN (R30,000) respectively.
Source of data and statistics: GMaven and “Statistics South Africa | Census Dissemination”
Given that the Western Cape has managed to sustain the lowest unemployment rate in the country even in difficult economic times, the province’s future prospects may look even brighter, with hopes that the new coalition government will drive GDP growth.
Cape Town is poised to benefit from this overall positive economic trend, with areas like Claremont and the CBD gaining huge popularity.
Cape Town Property Boom Reinvigorates Southern Suburbs
When thinking of Cape Town’s premier commercial property, areas like the CBD and Century City often come to mind.
While the city centre, with its renovated buildings and iconic new developments like Portside, the R600 million mixed-use development: The Rubik, and several other commercial only developments often grabs the spotlight, the southern suburbs, particularly Claremont, are actually leading in growth and low vacancy rates.
Recent reports highlight the extensive development that has taken place in Claremont, now home to several new developments. The suburb will welcome R1.3 billion in new investment as interest from buyers accelerates.
With mindful work and shorter commutes becoming more common, the suburb’s proximity as both a commercial and popular residential area is an attractive selling point for office spaces that have sprung up in the area, as well as established and newly renovated retail spaces.
Buildings such as this sophisticated office unit with beautiful mountain views have become increasingly popular with young professionals and start-up owners. Claremont’s leafy surrounding and malls like Cavendish Square, offer convenient shopping and dining options within walking distance of the office. Along with nearby bars and restaurants, this makes Claremont a popular spot to unwind after work, with many employees choosing to live nearby.
The convenience and charm of Claremont have established it as one of Cape Town’s premier residential and commercial property hotspots. The data below illustrates the growing popularity of the area.
Investing in Cape Town commercial property: a case for future growth.
With a healthy provincial economy, substantial foreign direct investment, and recent data indicating that property values continue to rise while vacancies remain low, the Western Cape stands as a stable and lucrative destination within South Africa.
Looking to the future, it’s easy to argue that the Western Cape will maintain its impressive track record and achieve even better economic outcomes as the country’s overall GDP growth improves.
South Africa’s young population and development backlog mean that the country can look forward to decades of expansion once its basic social and infrastructural challenges are resolved.
The Western Cape is a leader in this regard, with several initiatives already bearing fruit, including energy independence from the national grid, major investments in education and training, and the success of Silicon Cape – a community for tech innovators, the tourism industry, and business process outsourcing in the city.
With Cape Town’s population expected to exceed 5 million by 2050, the coming decades should bring great opportunities for economic development and rapid expansion in metropolitan GDP.
This should translate into increased demand for commercial property as new businesses spring up across the Cape Peninsula.
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Every successful property transaction begins with a perfect union of buyer and seller. Despite the many appeals of Cape Town property, the process of selecting a property and making an offer can be daunting – unless you have professional advice.
With decades of collective experience, the Commercial Space team has the contacts and expertise to match you with the ideal property that will suit your needs. Contact us today to get started.
