Visits to the V&A Waterfront in Cape Town have rebounded strongly in recent months, with over 90 000 visitors to the precinct in the second weekend of October.
This is more than double the roughly 40 000 level reached in June as the country entered Level 3. In an earlier update to the market, co-owner of the iconic development Growthpoint, said visitor numbers had trended up to 60 000 on weekends, about 60-65% of last year’s levels.
Visitor numbers during the week are at the 38 000 a day mark, up from just 3 000 at the start of Level 3.
Growthpoint says that while corporate tenants are “honouring rental obligations”, “commercial office occupancy remains low with remote working firmly in place”. It adds that there are “indications” its office tenants intend to bring back staff, albeit on a reduced number of days per week. By lettable area, Nedbank and Allan Gray are the precinct’s top two tenants with 25 000m2 and 20 000m2 of space respectively.
The impact of the hard lockdown and the gradual opening of the precinct in June saw footfall for the year ended June drop to around 21 million from the projected 26 million. Growthpoint says given that the lockdown hit the country at the “very peak of the tourist season”, trade in “retail, hotels, restaurants and cruise liner traffic literally fell off the cliff to zero activity in early lockdown”.
It says “critical to the Waterfront returning to normal activity is … the return of international tourists”.
The main Victoria Wharf Shopping Centre is fully open to trade, but in an investor update last week, Growthpoint noted that “areas with heavy dependency on tourism”, such as jewellery, curios and restaurants, are “not trading well”. The Waterfront has reopened the Watershed and V&A Food Market, but these are trading four days a week (Thursday to Sunday).
It said the precinct’s five- and six-star hotels are “largely dependent on international tourism and remain closed”.
In an update at the beginning of this month, V&A Waterfront CEO David Green said “some of our hotels will bring forward opening dates ahead of the summer season”.
The One&Only reopened on Friday, with Sun International’s Table Bay opening at the end of the month, and The Silo Hotel in late November. Earlier this year, Growthpoint said “around 80% of V&A hotel occupancies are international tourists who also contribute to about 50% of retail spend”.
Just under two dozen retail tenants (of a total of 500) have not yet reopened. The Zeitz Museum of Contemporary Art Africa reopens this week, leaving the cruise terminal as the only major property that remains shut (cruise ships are not yet allowed to call on local ports). In the last financial year, this terminal was on an “exponential growth trajectory” with over 200 000 visitors expected by end-June, from just 40 000 the year prior.
Overall, Growthpoint says it has “prioritised” rental relief according to the “strategic importance to the V&A and dependency on international tourism”. Any relief provided to national retailers was “in line with Property Industry Group guidelines”. So far, R100 million in rental discounts has been provided to tenants, with a further R81 million in rental credits.
The precinct has granted R58 million in rental deferrals, mainly in the hotel sector.
In its September announcement of its annual results, Growthpoint said “100% relief has been provided to [approximately] 300 food market and Watershed Craft Market traders”. Earlier this month, it quantified this as R15 million in relief. It also provided “working capital support in the form of non-interest-bearing loans to maintain jobs” at these SMME operators. A total of 178 permanent jobs were “retained and supported” with a further 100 temporary jobs supported.
Developments continue, with the new 8 500m2 Deloitte Cape Town office in a building named The Ridge adjacent to the UCT Graduate School of Business practically complete. This custom-designed green building will be handed over to Deloitte in November. The management company says this precinct, the Portswood Ridge District, has space for “another single-occupant head office” of approximately 4 500m2.
Makers Landing, a “local food community incubator”, will open in December. This will see the repurposing of a cold storage facility near the cruise terminal into an area with a food market, so-called co-op eateries as well as a handful of anchor restaurants. The Waterfront says Makers Landing will generate more than 150 jobs.
Plans are also advanced to re-let the space vacated by Edgars in the Victoria Wharf centre. In September, Growthpoint noted that a deal had not been “done with the new owners”.
The group says it plans to “carve” up the 6 000m2 space into smaller stores and that negotiations are “advanced … with existing international tenants to take [the] largest area”. It notes strong letting demand from “cosmetic brands”. The standalone Calvin Klein store operated by Edgars (under licence) will remain.