Cape Town boosted by big property developments
Category Cape Town Property Market
Major projects worth hundreds of millions of rand are going ahead in Cape Town, despite a slump in the construction sector.
These include the new Christiaan Barnard Memorial Hospital on the Foreshore and the expansion of the Cape Town Convention Centre.
Rob Kane, chairman of the Cape Town Central Improvement District, said the future of the CBD looked bright, especially considering the job opportunities the big projects would provide.
'It can easily be understood how the Cape Town CBD manages to contribute a total of 24.5 percent of business turnover to the larger Cape Town metro-region and provides in excess of 30 percent of the city's entire payroll.'
He said the list of major projects under construction included Touchstone House, worth R80 million, the upgrade to the Tsogo Sun in Strand Street, at R92m, the new Christiaan Barnard Memorial Hospital and the redevelopment of the Towers, worth R498m, and the expansion of the Cape Town Convention Centre at R690m.
'We also expect the next wave of development within the Cape Town CBD and immediate surrounds will be around residential development, as demand is now far outstripping supply, and there is a need to bring in more affordable residential options to ensure inclusivity and accessibility.'
Kane said the CBD had fared very well since the 2010 World Cup, and there had been a number of developments since then.
These included Portside (R1.6 billion), 22 Bree (the Bowman Gilfilan building, R360m), Atlantic Centre on the Foreshore (R160m), the refurbishment of Newspaper House ( R150m), 107 Bree Street ( R20m), Roggebaai Place ( R180m), 33 Heerengracht (R160m), Cape Town Station (R1.45bn), the provincial government's upgrade of complexes in Dorp and Wale streets (R138m), the Civic Centre (R32.8m), and the upgrade of the Centre for the Book in Queen Victoria Street (R10m).
Craig Bain, president of the Master Builders Association of the Western Cape, said at the association's recent annual general meeting there had been an increase in activity within the province's building sector this year, following a very tough period lasting several years.
'On the housing front, the western suburbs such as Parklands and Sunningdale continue to show unabated growth, and large new housing schemes are under construction in Pelican Park near Zeekoevlei and one due to start at Fisantekraal near Durbanville. All this will contribute to a more viable and sustainable construction industry. And, it is hoped, with better profit margins on offer, companies will be more willing to invest in education and training, and the general increase in skills, because these all remain in short supply in our industry.'
However, it was reported this week that the FNB and the Bureau for Economic Research said construction work and overall profit in South Africa had dropped, despite a rise in the civil construction confidence index in the third quarter of this year. In the report the FNB/BER said the medium-term outlook was less robust at national level because demand for new construction work was starting to wane.
Senior industry analyst at FNB Economics, Jason Muscat, said the level of the index suggested that close to half of the respondents were satisfied with prevailing business confidence.
Meanwhile, in another report this week, Deputy Labour Minister Patekile Holomisa said at the 2014 Master Builder South Africa congress in Port Elizabeth that collusion within the construction industry undermined the government's efforts towards social and economic transformation.
Holomisa said that last year would be remembered as the time in which anticompetitive behaviour in the industry came under the spotlight. He said more than 15 major construction groups were found to have been involved in bid-rigging and collusion and were fined a total of nearly R1.5bn.
Source: Cape Argus
Author: Cape Argus
