Cape Town’s Property Golden Age: Why the Boom is real

• Cape Town is outperforming the rest of South Africa across every major property sector, driven by governance, infrastructure, and global capital flows.
• The CBD has become a 24-hour mixed-use engine, with offices, residential, hotels and retail reinforcing each other’s growth.
• Development pipelines, rental growth and international demand point to another 12 - 24 months of strong momentum before a softer landing.

A City in a ‘Sweet Spot’

Presenting at the first Urban Real Estate Research Unit (URERU) seminar at UCT, sponsored by Quoin Technologies, Rob Kane, CEO of Boxwood Property Fund, described Cape Town as being in a rare “golden age” of property, ma convergence of economic resilience, investor confidence, urban management, and global appeal.

In 2024 alone, the Cape Town CBD recorded R9.1 billion in property transactions, up roughly 25% year-on-year - a growth rate most businesses struggle to achieve organically.

Tourism topped 11 million visitors in 2025, injecting more than R24.5 billion into the local economy and supporting thousands of jobs. Western Cape GDP growth, while modest in absolute terms, still outperformed the national average by around 50%.

This is not a cyclical blip. It is structural outperformance.

Why Cape Town is thriving

‍Kane identified two fundamental drivers:

1. Municipal Governance & Infrastructure
   Cape Town remains the only metro with consistent clean audits, reliable bulk services, and large-scale upgrades underway in transport, water and public realm infrastructure. Investors price certainty and Cape Town offers it.
   
   
2. District-Level Urban Management (CCID & SIDs)
   The Cape Town CBD is one of the most intensively managed urban precincts in Africa, with 24/7 security, cleaning, social development, and place marketing. This “control of the streetscape” has created an environment where private capital is willing to invest long-term.

Together, these form the invisible backbone of the city’s property resilience.

CBD Performance: The Engine Room

The Cape Town CBD punches far above its weight:

• 1.6 km² generating roughly 26% of the metro’s GDP
• ±1 million m² of office space
• Over 1,300 retailers
• 97 residential complexes and ±7,800 apartments (with another ±600 under construction)
• 67 conference venues and a world-class convention centre
• Hotels operating at near-capacity with five new international brands seeking entry

Vacancy rates tell the story: prime office vacancies below 6%, compared with double-digit levels in most other South African metros. P-grade and A-grade space is effectively full.

Market Trends by Sector

‍Office
The post-Covid “three days in office” reality is driving a flight to quality. Tenants want location, amenities, coffee shops, transport access and vibrant precincts, not just floor area.

Co-working has become a feeder system for future long-term tenants. Conversions of obsolete C-grade offices into residential are shrinking supply and tightening the market further.

Residential
Prices in new CBD developments have surged, driven by small unit sizes and strong investor demand. Micro-apartments allow buyers to enter the market, but Kane cautioned that long-term building management and social control will be critical to avoid future deterioration. Expect 12 - 18 more months of solid growth before price momentum moderates.

Retail & Restaurants
Inner-city retail is being reshaped by residential density, tourism and conference traffic. 91% of CBD retailers report satisfaction or strong performance. Streetscape curation – the right tenant mix, not just rent maximisation is proving decisive.

Industrial & Logistics
Vacancies are near zero, zoned land is scarce, and rentals are surging. Port inefficiencies are forcing retailers to hold more stock, increasing demand for warehousing. In some nodes, industrial rentals now rival B-grade office space.

Hospitality
Hotels are effectively “printing money”, with occupancy driven by tourism, cruise liners and international conferences. Airlift capacity is the main constraint, not demand.

Development Pipeline
There are currently over 30 major developments in the CBD, up 30% year-on-year, alongside numerous micro-redevelopments upgrading individual streets and precincts. Architecture quality is improving, with stronger focus on active ground floors, food markets, mixed-use podiums and public interfaces.

Cranes are the simplest leading indicator of confidence and Cape Town’s skyline is full of them.

Case Studies: What makes precincts work

‍Kane highlighted how long-term value is created through precinct control, not just individual buildings:

• The Box Precinct
  Office vacancies cut from 40% to near zero, rentals lifted from ±R120/m² to over R200/m² through upgrades, tenant curation and public-realm investment.
  
  
• Food Market Activation
  Instead of leasing to a single bank, a curated food hall generated far higher rentals, entrepreneurial growth and street vitality, proving that place-making outperforms short-term rent maximisation.
  
  
• CBD Residential Conversions
  Former derelict or low-grade office buildings transformed into residential and mixed-use assets, boosting surrounding values and night-time economy.

Rental Trends

‍Across sectors, rentals are rising, but selectively:

• Prime offices and logistics: strongest growth
• Residential: accelerating but approaching affordability ceilings
• Retail: performance linked directly to footfall quality and precinct management

The message is clear: good buildings in good locations are getting more expensive; weak assets are being repurposed or left behind.

The Future: 2026 and Beyond

‍Kane’s outlook is optimistic but disciplined:

• Another 12 - 24 months of strong momentum, especially in prime residential, offices and hospitality
• Growth will slow, not reverse, as affordability limits are reached
• Cape Town’s economy will continue to outperform national averages
• Fintech, creative and knowledge industries (over 50% of SA’s fintech start-ups) will anchor demand for urban space
• Conference tourism and global lifestyle migration will keep feeding the residential and short-stay markets

In short: Cape Town is not in a speculative bubble. It is in a structurally advantaged phase of its urban and property cycle.

As Kane concluded, the city’s “golden age” is not an accident. It is the result of governance, infrastructure, place management and long-term capital believing in one of Africa’s most investable urban economies.

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