Cape Town CBD investment hits record R12.8bn

• Cape Town CBD property investment surged 41% to R12.8 billion, with 29 developments transforming the city's skyline.
• Residential values continue climbing as sectional title prices reached a record median of R1.95 million.
• Strong retail, tourism, finance and creative industries are driving one of South Africa's strongest urban economies.

Inner-city property boom fuels investor confidence

Cape Town's central business district continues to cement its position as South Africa's premier investment destination, with new property development reaching a record R12.8 billion in 2025/26, a remarkable 41% increase on the R9 billion recorded the previous year.

The surge in investment comes as the city centre enjoys sustained economic growth, rising residential values, thriving tourism, expanding business activity and one of the country's strongest retail sectors.

According to the State of Cape Town Central City Report 2025 - A Year in Review, published by the Cape Town Central City Improvement District (CCID), the CBD has emerged as one of Africa's most resilient and attractive urban investment markets.

The report paints the picture of a city centre benefiting from long-term public and private sector investment, supported by a safe, clean and well-managed environment that continues to attract local and international capital.

The residential market also strengthened significantly during the year, with the median sectional title selling price increasing 5.4% to R1.95 million, while values have climbed more than 53% since 2020.

The annual report, now in its 14th edition, analyses activity across the CCID's 1.74 km² footprint and has become an essential benchmark for investors, developers, landlords and businesses assessing opportunities within South Africa's leading urban economy.

Property development pipeline tops R12.8 Billion

Cape Town's skyline continues to evolve, with 29 developments completed, under construction or in various planning stages during 2025/26.

The development pipeline includes:

• 8 completed projects valued at more than R1.9 billion
• 14 developments under construction worth over R5.4 billion
• 5 projects in the planning phase valued at approximately R5.4 billion
• 2 proposed developments, with values still to be confirmed

The overall value of all property within the Cape Town CBD now stands at R42.6 billion, according to the City of Cape Town's latest official property valuation. Residential development continues to dominate the market.

More than half of all projects are residential, representing 16 developments valued at R6.2 billion, reflecting sustained demand for inner-city living.

Affordable housing is also becoming an increasingly important component of the development pipeline, with the Western Cape Government supporting two major affordable housing projects conservatively valued at R2.9 billion, while the City of Cape Town has released civic land for additional affordable residential development.

Mixed-use projects are also reshaping the city centre. Among the flagship developments is the R1.2 billion transformation of the iconic Golden Acre office tower into a mixed residential and retail destination comprising approximately 450 apartments.

Another landmark project is City Park, the R1.3 billion redevelopment of the former Christiaan Barnard Hospital. The project will introduce Africa's first Mama Shelter Hotel, together with luxury residences and new retail offerings.

Meanwhile, One on Bree, valued at R1.1 billion, will deliver more than 500 hotel rooms together with 279 residential apartments, further strengthening the CBD's hospitality and residential offering.

Investor confidence continues to strengthen

According to Rob Kane, CCID Board Chairperson and CEO of Boxwood Property Fund, the scale of development reflects far more than construction activity.

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"It's astonishing to see development of this magnitude, but the real story is that these numbers not only reflect investor confidence, they inspire it. When confidence becomes concentrated in one place, it creates momentum that attracts even more investment."

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Kane notes that both international investors and Gauteng-based developers continue to increase their exposure to Cape Town's CBD, recognising its long-term growth potential and business-friendly environment.

The booming inner-city economy

Behind the development boom lies a diversified economy that continues to outperform many other South African city centres.

The report credits more than 26 years of consistent investment by the CCID in creating a cleaner, safer and better-managed CBD, while acknowledging the City of Cape Town's continued efforts to improve infrastructure and create an environment conducive to investment.

The city centre's economy remains underpinned by several high-performing sectors, including:

• Business Process Outsourcing (BPO)
• Business and leisure tourism
• Finance and investment
• Legal services
• Medical services
• Information and communications technology
• Property and real estate
• Architecture
• The rapidly expanding creative economy

By the end of 2025, the CBD was home to 3,547 businesses, with 12 of the 21 major business sectors recording growth during the year.

The legal and medical sectors remained the largest non-retail occupiers, while finance, ICT, BPO and telecommunications all expanded their footprint.

Retail occupancy remains exceptionally strong‍

Retail continues to be one of the CBD's standout success stories. A total of 1,495 retailers were operating in the Cape Town CBD during 2025, the highest number ever recorded.

The sector welcomed 172 new retail outlets during the year, reinforcing confidence in the city centre's growing consumer economy. Restaurants remain the single largest retail category, accounting for approximately 11% of all retailers. Retail occupancy also remained exceptionally resilient.

Across the CCID's four precincts:

• 88% of retail space was occupied
• 1,495 of 1,704 retail units were actively trading
• Vacancy remained low at 12.3%

Business confidence also reached impressive levels. According to the CCID Business Confidence Index, 98% of retailers surveyed during the final quarter of 2025 described trading conditions as favourable, up from 92% the previous year.

KEY FIGURES

Property Investment

• R42.6 billion — Total value of Cape Town CBD property
• R12.8 billion — New property investment during 2025/26
• 29 developments completed, underway or planned
• R5.4 billion worth of projects currently under construction
• 16 residential developments valued at R6.2 billion
• 6 commercial developments valued at R2.4 billion

Residential Market

• 7,675 residential apartments within the CBD
• R1.95 million median sectional title selling price
• 5.4% annual growth in median prices
• 53.5% increase in median apartment values since 2020

Retail Performance

• 1,495 retailers operating in the CBD
• 172 new retailers opened during 2025
• 88% retail occupancy
• 98% retailer confidence rating

Office Market

• 11.9% Cape Town CBD office vacancy rate (Q2 2026)
• 6.2% City-wide office vacancy rate—still the lowest among South Africa's major metropolitan areas
• The CBD continues to account for 39% of all office space in Cape Town while remaining one of the city's most competitively priced premium office locations.

Investment Outlook

The latest State of Cape Town Central City Report reinforces the CBD's position as South Africa's strongest urban investment story.

Record development activity, rising residential values, expanding business sectors and resilient retail performance continue to attract both local and international investors.

As billions of rand continue flowing into residential, commercial and mixed-use developments, Cape Town's city centre is evolving into one of Africa's most dynamic urban precincts, offering investors a rare combination of economic resilience, sustained capital growth and long-term confidence.

With more than R12.8 billion in developments reshaping the skyline and investor appetite showing little sign of slowing, the Cape Town CBD remains one of the country's most compelling property investment destinations.

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