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11 August, 2022

How Cape Town transformed its city centre into a post-Covid winner

Cape Town’s city centre is now the most economically sound and successful inner-city precinct in South Africa, but how did it get to this point?

By Sebastian Shehadi

The continued success of Cape Town as a destination of choice for global investors and travellers is no accident.

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Global levels of foreign direct investment (FDI) saw a strong rebound in 2021, as the market started to recover from the pandemic-driven downturn the prior year. But which locations, sectors and companies led the charge back to FDI growth? And can the momentum be maintained? Using our proprietary FDI Projects Database, GlobalData’s Investment Monitor team have sifted through the yearly data to provide a mapping of the investment landscape. The database, which tracks greenfield FDI projects in real time, is the most comprehensive in the market and has reported more than 3500 more projects for 2021 than other FDI data providers. The report also includes analysis of M&A data and a snapshot of corporate trends impacting investment. To see how the world’s major investment destinations performed in 2021, how top sectors and subsectors compare as drivers of FDI, and which companies are most active internationally, download this free report.
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Despite the Covid-19 pandemic, the South African city, known for its picturesque coastlines, has remained resilient within the African continent thanks to effective governance and initiatives that have kept the local economy ticking over during the country’s lockdowns.

For example, at the height of the pandemic in South Africa, in the third quarter of 2020, the province of the Western Cape, in which Cape Town is located, accounted for £20bn (R395.83bn) of the country’s gross domestic product of £146bn. Cape Town is, by far, the main engine of growth for its province.  

The city is South Africa’s top-rated region in the office market, an indication that it may surpass Johannesburg as the country’s business hub, according to recent surveys by South Africa’s First National Bank. Meanwhile, the residential property market has boomed due to the work-from-home trend

Cape Town’s talent pool is of the highest calibre, not least thanks to the University of Cape Town, generally considered to be Africa’s most prestigious academic institution. However, a large part of the city’s success, and resilience during Covid-19, can be attributed to the work of the Cape Town Central City Improvement District (CCID), a public-private partnership and non-profit organisation which, for the past 21 years, has ensured the economic success of the city’s central business district (CBD).

Two decades of transformation

Cape Town’s CCID has one clear brief: to fulfil an ‘open for business’ mandate by attracting local, national and international investment to the city’s business district. It has achieved this, resoundingly. 

The entity, which grew out of a commitment to turn around a divestment trend in the CBD at the turn of the millennium, took its lead from how New York transformed Times Square from a no-go zone into one of the most prominent pieces of real estate in the world.

Within months of its launch in 2000, projects valued at £123m were under construction in the central city area of Cape Town, and by 2003, new investments worth more than £403m had been implemented. Two decades on, the value of inner city property has increased to more than £2bn.

The renewal of Cape Town’s inner city is evident not only in the increased footfall into the city centre but through investment in upmarket apartments, shops, restaurants, the construction of new mixed-use developments, renovation of older buildings and the presence of large and small corporates that have made the CBD their home. A highly regarded CCID-run investment promotion team has been key to this. 

“Through the initiatives of our various departments, we created a platform for investment by halting the ‘broken window’ theory and dealing head-on with problem areas,” says Tasso Evangelinos, CEO of CCID.

“Through our safety and security department, we introduced the ‘bobby on the beat’ concept [with security officers wearing body-worn cameras] in the CBD’s streets, and through our sweeping, road maintenance and graffiti teams in our urban management department, we preserved the city centre’s infrastructure.” It is worth noting that, due to South Africa’s high level of urban crime, safety measures have been essential in making Cape Town’s central district a more welcoming place for business. 

Evangelinos’s team have also forged partnerships with non-governmental organisation partners to find creative ways of addressing pressing and challenging social issues, such as homelessness in the CBD. 

Alan Winde, premier of the Western Cape provincial government, says the CCID has played a pivotal role in promoting safety, culture and service delivery in the local economy to ensure visitors are able to enjoy world-class dining, a vibrant coffee culture, a dynamic art scene and bustling nightlife, without ever having to feel their safety is being compromised. 

Making the best out of a pandemic

Evangelinos, who has been at the helm of the CCID since 2007, says the entity has certainly had to negotiate its fair share of challenges over the years, none greater than the Covid-19 pandemic. 

While an estimated 111 retail businesses closed their doors in downtown Cape Town by the end of 2020, 37 new businesses had begun trading in the CCID’s 1.6km2 footprint in 2021. 

According to the CCID’s latest Retail Confidence Index, released in May, almost 68% of CBD retailers surveyed during the second quarter of 2022 are satisfied with current business conditions – the third consecutive quarter in which retail confidence has moved into positive territory since the start of the pandemic in 2020.

Evangelinos’s team was proactive during South Africa’s lockdown. Beyond the sanitisation of all public-use spaces in the CBD, they embarked on a series of beautification and greenification projects across the city. 

The entity also recognised that retailers, property owners and residents would be concerned about their assets as they worked from home. To reassure them, the CCID workforce, 98% of which remained on the ground during the lockdown, went about securing all windows and doors, advising retailers to remove display goods from windows, checking alarms and providing escorts for business owners to move around safely.

“We kept reinforcing the message that people’s properties were in good hands, that nothing was going to happen to their buildings or shops,” says Evangelinos. “Our communications team, who took countless videos and photographs, were fantastic, conveying this information to all our stakeholders.

“Our structures and partnerships were tested to the limit by Covid-19 and the government’s subsequent regulations to stem its tide. But we not only survived, we succeeded in maintaining a safe and secure CBD for our stakeholders, ensuring that the central city was open for business, encouraging office workers and visitors to come back to town.”

As an indicator of the CCID’s efforts, chairman Rob Kane points out that in the financial year 2021–22, the CBD still managed to attract an estimated £337.3m in property investments.

“The resilience and sheer staying power of the Cape Town CCID has been nothing short of remarkable,” he says. “Tasso Evangelinos and his team, and the CBD’s businesses and entrepreneurs, can be applauded for faring greatly during this extremely challenging period.”

As a template for urban regeneration and economic resilience, Cape Town’s CBD is indeed an excellent reference point. It is also a model for how to use foreign investment to a city’s best advantage. 

Free Report
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Global FDI Annual Report 2022

Global levels of foreign direct investment (FDI) saw a strong rebound in 2021, as the market started to recover from the pandemic-driven downturn the prior year. But which locations, sectors and companies led the charge back to FDI growth? And can the momentum be maintained? Using our proprietary FDI Projects Database, GlobalData’s Investment Monitor team have sifted through the yearly data to provide a mapping of the investment landscape. The database, which tracks greenfield FDI projects in real time, is the most comprehensive in the market and has reported more than 3500 more projects for 2021 than other FDI data providers. The report also includes analysis of M&A data and a snapshot of corporate trends impacting investment. To see how the world’s major investment destinations performed in 2021, how top sectors and subsectors compare as drivers of FDI, and which companies are most active internationally, download this free report.
by GlobalData
Enter your details here to receive your free Report.

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