Amidst a backdrop of challenges and disruptions, the commercial real estate market in Cape Town has exhibited remarkable resilience over the past 18 months, experiencing steady growth and surging demand, particularly in prime locations proximate to the city center. This upward trajectory can be attributed to several key factors, including Cape Town’s status as a global business and tourist hub, an influx of businesses relocating to the area, and substantial investments in infrastructure, all of which have contributed to a notable increase in sales volumes.
Data from the Deeds Office for 54 suburbs in Cape Town reveals a consistent upward trend in sales figures over the past year. For the 12 months ending December 2022, a total of 777 units were sold at an average price of R7.762 million, with a combined sales value of R6.031 billion. By March 2023, sales had surged to 959 units, with an average price of R6.932 million and a total sales value of R6.648 billion. This positive momentum continued through June 2023, with 1155 units sold at an average price of R6.434 million and a total sales value of R7.432 billion.
Despite the robust increase in sales volumes, there has been a slight decline in average sales prices, attributed to owner-occupiers seeking value and limited availability of stock in the disposal market. Notably, warehouses and logistics buildings exceeding 5000m² are in short supply, with those over 10,000m² in prime locations virtually unattainable for purchase or rent.
Addressing these shortages poses a significant challenge, as zoned and serviced land near the metro has become increasingly scarce, with few exceptions such as the N7 corridor and select stands in Elsie’s River. Most major industrial parks have exhausted their bulk allocations, exacerbating the scarcity of available properties in high-demand areas.
The Cape Town CBD has the highest concentration of Commercial Property in the Western Cape. The CBD is located within the City Bowl. This area is dominated by iconic and landmark high-rise buildings. Despite the trend od relocating to outlying area, the CBD remains a popular destination for many of the country’s top companies. Cape Town CBD has a number of areas popular within the financial services, tech as well as the legal fraternity. Cape Town has also proven to be the top location for local as well as international call centers, with a range of affordable office spaces to rent. The CBD offers a unique environment where people can take in the sites and culture of the city. Or range of high-rise buildings offers spectacular views of both Table Mountain and the Atlantic Seaboard. Access to the Cape Town CBD is via an extensive road network, including the N1 and N2 highway. The CBD is home to Parliament, the courts as well as the City of Cape Towns administrative offices.
