City of Cape Town and Walmart shake up CRE sector

Public-private partnerships and global retail giants drive commercial property renewal

- JOHN JACK

TWO HIGH-PROFILE developments in the South African commercial real estate (CRE) sector are pointing to renewed momentum in the market: the City of Cape Town's proposed sale of its majority stake in the Cape Town International Convention Centre (CTICC), and Walmart’s decision to launch branded stores in South Africa.

Movement across multiple fronts in CRE bodes well for investor sentiment in South Africa.

On the one hand, functional municipalities, such as those in the Western Cape, are reassessing how best to unlock value from city assets to benefit taxpayers. On the other, major global players are making long-term retail commitments in South Africa.

These shifts come against the backdrop of five interest rate cuts by the South African Reserve Bank this year, creating a more supportive environment for growth by easing borrowing costs. This is a time for CRE stakeholders to remain both agile and forward-focused, because major opportunities could arise.

Cape Town weighs the future of the CTICC

The CTICC has long been one of Cape Town's most successful assets.

Since it opened in 2003, it has generated nearly R67 billion for South Africa’s GDP, sustained more than 169 000 jobs, and helped cement Cape Town's position as a global conferencing destination.

In the past financial year alone, the centre hosted 368 events, attracted 311 000 visitors, and secured forward bookings worth an estimated R1.5 billion through 2030.

This begs the question: Why is Cape Town mayor Geordin Hill-Lewis considering selling the city’s 72.7% stake in this thriving centre? Primarily, this sale would free up between R800 and R900 million in capital for infrastructure and service delivery.