Cape Town CBD Development Hits R12.8bn, Up 41% — But the Office Numbers Tell a Second Story

Market Report

Cape Town, South Africa  |  3 August 2026  |  Property News Africa

The total value of property development in the Cape Town central business district reached R12.8 billion in 2025/26 — a 41% jump on the R9 billion recorded the year before, according to the 14th edition of the State of Cape Town Central City Report, released by the Cape Town Central City Improvement District (CCID) at the Portside Building on Wednesday 29 July. The figure covers 29 developments spread across the CCID’s 1.74 km² footprint, and was described by the CCID as a conservative estimate, Engineering News reported.

It is a headline number that has travelled fast through South African media. But read past it, and the same report contains a second, quieter data point that materially changes how an investor should interpret the first: the CBD’s own office vacancy rate is rising, not falling.

What the R12.8 Billion Actually Counts

The R12.8bn is a pipeline figure, not delivered capital. According to the CCID’s breakdown, reported by Daily Friend, the 29 developments split into eight completed schemes worth more than R1.9bn, 14 under construction worth more than R5.4bn, five in the planning phase valued at R5.4bn, and two proposed developments whose values are still to be confirmed.

That distinction matters. Roughly R5.4bn of the total — more than 40% — sits in the planning phase, and two further schemes carry no confirmed value at all. Planning-stage projects in any market are subject to funding conditions, approvals and abandonment. The completed portion, R1.9bn, represents about 15% of the headline number.

For context on scale: the official value of all property in the CBD stands at R42.6bn — but that draws on the City of Cape Town’s 2022 property valuation, now four years old and almost certainly understating current values.

Residential Is Where the Money Went

For the second consecutive year, residential builds — together with mixed-use schemes carrying a strong residential component — dominated the CBD development map. Sixteen new residential developments account for R6.2bn of the pipeline, more than half the total.

The five-year picture is more instructive than the single-year spike. Between 2021 and 2025, 22 predominantly residential builds worth R5.1bn came on stream, adding approximately 3 260 apartments to the CBD’s housing stock. That is sustained absorption, not a one-off.

CCID board chairperson Rob Kane, who is also chief executive of Boxwood Property Fund, told EWN that most of the investment sat in residential developments and hotels, and that international hotel groups entering the city were behaving as long-term players. Speaking to Voice of the Cape, Kane also pointed to a notable shift in the buyer base — offshore investors and Gauteng-based developers are now active in the node, alongside continued redevelopment of older and heritage buildings.

The Office Number the Headlines Skipped

Nearly every report on the CCID release repeated the same line: Cape Town has the lowest office vacancy rate in South Africa. That is accurate — but it refers to the metropole, not the CBD.

Per the report, as summarised by IOL, the Cape Town metro office vacancy rate was 6.1% at the end of 2025, edging up to 6.2% in Q2 2026 — still the lowest of any South African metro on SAPOA’s measure. Within the CBD itself, however, the office vacancy rate was 10% at the end of Q4 2025 and had climbed to 11.9% by Q2 2026.

That is a rise of nearly two percentage points in roughly six months, and it places CBD office vacancy at close to double the metro-wide figure. The report also notes that asking rentals for premium-grade office space in the CBD are the most competitively priced in the city — competitive pricing being, in a softening market, both a selling point and a symptom. The CBD still holds the largest single share of the city’s office stock at 39%, on SAPOA’s measurement.

None of this makes the R12.8bn figure wrong. It makes it specific. Capital is rotating into residential and hospitality inside the CBD at the same moment its office fundamentals are loosening — which is a rational reallocation, but one an investor should see clearly before assuming the 41% applies evenly across asset classes.

Retail Holds Its Ground

Retail was the steadier story. Occupancy held at 88% across the CCID’s four precincts at year-end, with 1 495 of 1 704 retail units occupied and actively trading, and vacancies at 12.3%. A further 172 new retail outlets opened over the reporting period, and 98% of retailers surveyed in the CCID’s Q4 2025 Business Confidence Index described trading conditions as favourable.

Outside retail, the legal and medical professions led the non-retail base, with additional growth in finance, investment and insurance, ICT, business process outsourcing and telecoms, accommodation, architecture, and property and real estate. In total, 3 547 businesses were operating in the city centre in 2025.

Snapshot: Cape Town CBD 2025/26

Metric	Figure	Note
Total development value 2025/26	R12.8bn	Up 41% from R9bn; CCID calls it a conservative estimate
Developments in pipeline	29	8 completed / 14 under construction / 5 planning / 2 proposed
Completed value	R1.9bn+	Roughly 15% of headline figure
Under construction	R5.4bn+	14 schemes
Residential pipeline	R6.2bn	16 developments; over half the total
Median sectional title price	R1.92m	Up 5.4% year on year
CBD office vacancy	11.9%	Q2 2026, up from 10% in Q4 2025
Cape Town metro office vacancy	6.2%	Q2 2026; lowest of SA metros (SAPOA)
Retail occupancy	88%	1 495 of 1 704 units trading; 172 new outlets opened
Total businesses in CBD	3 547	2025; legal and medical lead non-retail
Total CBD property value	R42.6bn	Based on City of Cape Town’s 2022 valuation roll
CCID footprint	1.74 km²	Per 2025 report; CCID’s site elsewhere cites 1.6 km²

The Affordability Pressure Underneath

The CBD’s residential market posted a genuine boom, with the median price of sectional title units sold rising 5.4% to R1.92m. Strong for owners. Considerably less so for the workforce that staffs the 3 547 businesses operating in the same square kilometres.

Kane acknowledged the tension directly, telling EWN that rising CBD rental costs are not unique to Cape Town but a challenge facing cities worldwide, and describing the City of Cape Town’s efforts to increase affordable housing supply as encouraging. That is a fair framing — but it is also an open question sitting under a R6.2bn residential pipeline weighted toward the upper end of the market.

Kane attributed the broader confidence to 26 years of CCID work on safety, cleanliness and public realm in the city centre, and credited Executive Mayor Geordin Hill-Lewis with helping create conditions in which investment could flourish.