As the only listed property REIT with our focus fully on the Western Cape, I know I may be a bit biased, but isn’t Cape Town just getting it so right – despite economic pressures, labour disputes, electricity woes, mismanagement, unemployment, and negative perceptions abounding?
A study conducted by Brand South Africa in June 2021, took a look at South Africa’s global reputation – how, in a competitive and unpredictable global environment, stakeholders perceive us and how that impacts investment, trade profile and policy environments, reputation standing and favourability.
South Africa has done a great job in creating positive perceptions around space, place and nature, culture, sports and entertainment. The biggies like public governance, products and services, safety and security, the economy and business ecosystems, I am glad to say, are a close second and while our reputation is aligned with reality (ask any visitor or semigrant to Cape Town) perception can only take you so far.
It is really pleasing to me to see how local Government, the private sector, stakeholders and institutions continue to create a favourable environment by taking action and improving infrastructure that is conducive to investment, and at the same time sparking global interest. In April last year, Moody’s revised their June 2021 rating for the City of Cape Town to an investment grade with a stable outlook – the only municipality in South Africa to do so. Ratings Africa published their annual municipal financial index for the year ending June 2021 and names Cape Town as the only metro as financially sustainable.
There has been a significant rise in demand for bulk warehousing, manufacturing and distribution outlets and many a multi-national is looking to SA, in particular Cape Town, to set up an office. Low operating costs and our young and growing workforce is ideal for businesses wanting to invest in the region.
We have certainly noticed the uptick in global interest which bodes well for our economy, job creation and investment. There has been a significant increase in rentals in the commercial space – we have just rented 2 000m² at Upper East Side for a large, international corporation’s call centre. The BPO market is booming in Cape Town with more than 70 000 people working in this sector alone and in the first quarter of 2022 the international BPO market in Cape Town contributed around R14 billion to the Metro’s economy.
South Africa has taken a right turn in attracting global interest and we continue to build a positive narrative about what our country has to offer – the tourism industry is booming again and hotel occupancies have picked up along with increased popularity for the Airbnb market. This bodes well for the ongoing foreign investment necessary to support the country’s growth and development objectives, for the emerging and highly profitable renewable industry, along with job creation and skills development.
Due to the really strong performance of our FY23 interim results along with acquiring The Island Urban Logistics Park in Paarden Eiland which is 100% occupied by local and international tenants, we continue to reinforce our position in the Western Cape. The pipeline is looking healthy for 2023 and Spear will most certainly be expanding our strategic reach which will help to feed this growing offshore interest.