Efforts to unleash Cape Town’s potential have not been in vain. Opportunity seems to be everywhere and the city has become the year-round business and tourism destination of choice.

Who has not been awed by Cape Town’s majestic beauty and charm? The Irish certainly have been. In May, leading Irish property group Howard Holdings plc led a consortium in securing the famous “Lady of Wale Street”, an historic building in the centre of Cape Town.

The deal includes the purchase of seven buildings in the heart of the city’s central business district. The developers are planning a premier international-brand six star hotel, residential apartments, retail space and premium office space, investing up to R350m ($42m). It will constitute one of the largest private sector inner-city renewal projects in South Africa.

South Africa’s favourite city, known affectionately as the Mother City, is in resurgent mood. It is now one of the world’s hottest cities, feted by travel magazines and visited by the international jet set. Yet behind the scenes there is an army of people who have worked hard to get it there. To them the Irish deal is a powerful endorsement of their efforts, proof that Cape Town has indelibly marked itself out on the international map. The hope now is to transform Cape Town into a city that is spoken of alongside London, Paris, Sydney and San Francisco.

Revitalisation

To unlock Cape Town’s potential, the provincial and local government teamed up with the private sector to establish the Cape Town Partnership in 1999. This body is dedicated to the revitalisation of the Cape Town central city by developing, managing and promoting it as a premier international destination for business, investment, retail, entertainment and leisure.

In less than four years the results speak for themselves with more than R5bn worth of upgrades, new developments and new lease agreements which have been secured.

It is a remarkable turnaround considering just five years ago there was a steady exodus of businesses and residents from the city centre as urban decay and crime took their toll. The implications were dire. The central city constitutes more than 20% of total economic turnover of the entire Cape Town metropolitan area and provides one-quarter of all jobs.

A city for all

Cape Town Partnership CEO Michael Farr says: “We are building a globally competitive city for residents, investors and visitors to enjoy. There are now an abundance of investment opportunities, either to participate in the ongoing urban renewal or to locate businesses to the city. The global trend of corporate disaggregation, hiving business units off to lower cost centres makes Cape Town an ideal choice for functions such as R&D, call centres or IT administration.”

Much of the success of the Cape Town Partnership initiative can be attributed to an improvement in the public environment, made possible by top-up services provided by the Central City Improvement District (CID).

The creation of CIDs in cities throughout the world has often been the catalyst for rejuvenation, resulting in a major turnaround in services, investment, and – just as important - an individual sense of civic pride. The Cape Town Partnership led the process by which the first legally constituted major city CID in South Africa was formed and continues to act as managing agent.

The CID focuses entirely on making the central city clean and safe, delivered through the topping up of guaranteed municipal services paid for by a levy on property rates. The levy raises over R15m a year, over half of which is spent on additional safety for the central business district (CBD).

The CID provides 160 dedicated security personnel in the CBD, including 126 officers on foot, 24 officers in five cars and 10 officers on horseback. The ground patrols are backed up by 75 surveillance cameras, a further 32 officers and five rapid response vehicles, 20 municipal officers, 24 traffic officers and 50 parking marshals.

Since the implementation of the CID in November 2000, the CBD has achieved a 60% reduction in crime in core areas of the Central City over the period. Over 95% of crime now committed in the CBD is of a petty nature and crime statistics are now on a par with most international cities and better than London and New York, according to the Cape Town Partnership.

To keep the city clean, CID service providers collect an additional 40 tons of refuse in the CBD every single month, making sure the City centre is clean around the clock.

Moving back

As a consequence, retail vacancies in the city have dropped by almost 70% since 2000 while there has been a marked increase in upgrades from B- to A-grade commercial space in response to renewed interest in the CBD. And, most significantly, people are returning to live in the city. Mr Farr says, “A 24-hour city where people live is a vibrant place that attracts new businesses and is safer and more secure.”

Plans are underway to boost inner-city transport with a high-frequency bus system, aimed at city residents but providing tourists with a convenient means to get around the city.

Central point

There’s a simple rationale behind the focus on the central city, which geographically is just a small fraction of the greater Cape Town metropolitan area. Mayor Nomaindia Mfeketo explains: “It is clear from all our research that both national and international investors look to our central city and its success as a benchmark – a standard which motivates the consideration of investments elsewhere in the metropole. In that regard, the health and success of Cape Town’s central city will prompt investments elsewhere and help to generate access to job opportunities throughout the metropole.”

The Cape Town Partnership was instrumental in bringing Howard Holdings to Cape Town, spending eight months assisting the company with information on investment opportunities, tax incentives, the property market and potential for leisure and retail investment in the Cape Town CBD.

Frank Gormley, Howard Holdings plc chairman, says such is his confidence in Cape Town that a new company, Eurocape Investments Limited, has been established to focus on investment and development opportunities in the city. Eurocape has plans to build up a substantial portfolio in the Cape Town region and has already been active in the market place.

“We have had a great deal of experience and success in investing in property redevelopments in CBDs of cities that have blossomed as a result of urban renewal and we are absolutely committed to this project. Dublin’s own project, the Temple Bar district, has achieved spectacular success in urban renewal, and Cape Town is showing every sign that it will be one of the world’s finest [redevelopments],” says Mr Gormley.

Foreign interest

According to Mr Farr over 80% of new investment in the CBD has been by South African companies and individuals so he is particularly encouraged by the foreign interest. “It was important that we secure local interest and investment as this indicates domestic confidence in the city; the foreign interest proves that we are on the right track,” he says.

A number of other international investors were in the bidding against Howard Holdings. The Irish deal – plus other investments such as the new Arabella Sheraton Hotel – brings the total foreign investment in the city to R1bn.

Mr Gormley, a frequent visitor to Cape Town over the past few years, says he has been very impressed by what he describes as a “remarkable turnaround” in the CBD, adding that it now offers some stunning opportunities for his company to explore in the leisure, residential and IT sectors of the market”.

Mr Gormley says that the work done by the Cape Town Partnership “has put Cape Town’s CBD in an international league that will result in significant interest from the international investment community”.

Shifting skyline

A constantly changing cityscape is something Capetonians are growing accustomed to. The latest major addition to the city is the Cape Town International Convention Centre, described as the “missing piece in the puzzle” to complement the city’s 200 existing conference and meeting facilities. Set to open in July, this modern facility, with more than 10000 square meters of exhibition space and auditoria for 2100 delegates, will spur Cape Town to new levels of activity.

The Cape Town Convention Bureau, set up to market the city as a meetings, incentives, conferences and exhibitions (MICE) destination, has secured more than R231m worth of convention business for Cape Town between now and 2010. This excludes any conferences or conventions that are still being bid for, and any that have been booked independently and not through the bureau’s offices.

Rick Taylor, CEO of the Cape Town Convention Bureau, goes to great lengths to explain in practical terms what this means: 34,000 convention delegates spending a total of 136,000 bed nights in Cape Town between now and 2010. Conferences yet to be confirmed amount to an additional R199m. Should Cape Town win these bids, the economic impact would amount to R430.6m.

“The economic impact has been worked out using the number of delegates, the number of days they spend on conference and the average spend of each delegate while they’re here in the Mother City. It excludes an approximate 19% of those who typically travel with a spouse or partner on conference. The impact also excludes any pre or post-conference tourism stays,” says Mr Taylor.

Rising numbers

While most conventions attract between 400 and 1500 delegates, some, like the International Congress of Radiology, will see up to 4000 convention delegates descend on Cape Town in 2006. In addition, Cape Town has won the bid to host the International Congress of Actuaries in March 2010, attracting up to 3000 participants from more than 35 different countries.

“When tourism is generally discussed, the mindset is still very much leisure focused. The MICE industry is a lucrative tourism node. It is important that Cape Town recognises the value of this market and gears itself to providing world class goods and services that go beyond the industry’s expectations. In this way, Cape Town will prove its status as a top international, all-year-round destination,” says Mr Taylor.

“Internationally, Cape Town is now regarded as one of the best-value-for-money destinations in the world. Delegates attending conferences should be encouraged to stay on and experience the many attractions that Cape Town and the Western Cape has to offer.”

Developing together

The new Cape Town International Convention Centre, together with the Arabella Sheraton and the Roggebaai Canal, linking the city to the sea, have formed part of a new development node in the foreshore part of the city centre. Ultimately, it will link the city to Cape Town’s world class Victoria & Alfred Waterfront, itself a historic docklands renewal project.

The V&A Waterfront, one of the most successful projects of its kind in the world, is testament to the enormous potential of urban renewal. It is now South Africa’s top tourist attraction, drawing more than 22 million visits annually. The development maintains a working harbour alongside offices, residential units, shopping centres and leisure and entertainment attractions. It has established itself as one of the country’s premier property development success stories.

One of the Cape Town Convention Bureau’s aims is to see seasonality in Cape Town fall away completely, in effect meaning a year-round influx of visitors. Encouragingly, recent figures released by the Airports Company South Africa (ACSA) show a significant increase in international, regional and domestic passenger statistics during traditionally off-peak periods. In some cases, off-peak statistics are exceeding those from peak seasons of previous years.

Sustaining levels

The creation of sustainable demand is one of the greatest challenges facing destination marketing organisations and consequently business in the Western Cape and South Africa. The opening of the Cape Town International Convention Centre looks set to provide a sustained boost to these efforts. In addition, Cape Town has just joined the Best Cities network, an elite global alliance of convention destinations recognised for their world-class facilities and services levels. Other cities includes Boston, Copenhagen, Dubai, Edinburgh, Melbourne and Vancouver.

As Mr Taylor points out, it is crucial that local infrastructure keeps pace with growing demand. But he is optimistic. The hard work to create an environment attractive to investors is paying off. The city is one of the most desirable places on the planet to live and work; the city benefits from the best skilled workers in South Africa; and the cost of doing business is competitive. Opportunities abound.