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Monday Jul 06, 2015

Cape Town's CBD shows signs of impressive growth

Recent surveys show that Cape Town's central city is enjoying a regeneration which has partly been responsible for its recognition as a top tourism and business destination.

An artist's impression of the Tsogo Sun Hotel complex which will occupy the entire city block on the corner of Strand Street between Bree Street and Buitengracht.   Dexter Moren Associates

The city's tourism sector has shown impressive signs of growth in recent years. A study in 2013 by business services company Grant Thornton, which was commissioned by the city, showed that direct spend on tourism in Cape Town grew by 5.6 percent a year from 2009 to 2012.

As a result, occupancy rates in Cape Town's 87 hotels are around 67 percent - compared to the national average of 60 percent - according to a research report on the hotel industry in Cape Town that was commissioned by Wesgro, the province's agency responsible for marketing, investment and trade promotion. The same report said there was capacity for 1 500 to 1 800 more hotel rooms, mostly in the three and four star categories.

In line with this demand, Nedbank Property Finance recently provided R500 million in finance for the development of a 303-room three-star Stay Easy Hotel and a 202-room four-star Sun Square Hotel, both of which will be operated by the Tsogo Sun Holdings Group.

The two hotels will occupy an entire city block between Buitengracht and Bree Street, within easy walking distance of the CTICC, the V&A Waterfront and Cape Quarter, as well as the popular Bree and Long Street entertainment precincts.

The heritage facade will be retained and the Sun Square Hotel will offer a rooftop pool. Construction started in May and the hotels will open to the public in September 2017.

Driven by the Cape Town Central Improvement District ( CCID), the revitalisation of Cape Town's 'downtown' precinct has been highly successful so far, according to the recent State of Cape Town Central City Report. Survey respondents included 235 business owners and managers, 293 residents and a random sample of 1 620 CBD "users", of which 89 percent rate the Cape Town CBD as the best in SA, and 93 percent of businesses operating in the city are happy with it as a location to do business.

Richard Thomas, Nedbank Property Finance's regional executive for the Cape, says a lot of effort has gone into stimulating investment in Cape Town's inner city, such as declaring the CBD an urban development zone which offers tax benefits to those investing in and developing those zones.

Cape Town is also considered relatively safe compared to other cities in South Africa, and even globally, with 82 percent of respondents in the 2014 City of Cape Town report saying they feel safe during the day, and 85 percent at night. The MyCiti BRT system has proved to be hugely popular and 2.85 million passengers were carried during 2014 and the city has well- designed pedestrian and bicycle access.

"From only around 750 residents a decade ago, the CBD's residential population is estimated at around 6 000 and the central city is well on its way to achieving a true 24/7 live, work, play lifestyle," says Thomas.

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