Mixed-use developments driving Cape Town CBD property boom
Cape Town CBD residential units remain popular with buyers viewing the inner city as a vibrant, mid- to long-term investment.
Image: Henk Kruger/Independent Newspapers
The bulk of property investment into the Cape Town CBD continues to be in residential and mixed-use developments.
Unpacking property trends, Grant Elliott, the deputy chairperson of the Central City Improvement District (CCID) board and the COO of property development company Thibault Investments owned by the Heriot REIT, said Cape Town’s broader residential market is still showing strong price growth compared with other South African cities.
The latest data from Stats SA’s Residential Property Price Index shows that Cape Town recorded the strongest annual residential price increases in SA, with prices up around 9.1 % year-on-year to September 2025, outpacing other major cities.
“This points to sustained demand and price momentum as we head into 2026,” Elliott asserts.
Cape Town CBD residential units remain popular with buyers viewing the inner city as a vibrant, mid- to long-term investment.
This is said to be reflected in the increase in the number of residential units in the CBD, which has grown to over 7 000 units.
According to the CCID’s latest State of Cape Town Central City Report, the increase in the median price of sectional-title properties rose from R1.27 million in 2020 to about R1.95 million by 2025, representing a 53 % increase over five years.
Supply constraints in quality CBD office space are expected to persist, given the lack of new office stock being introduced into the market, according to Quintin Rossi,CEO of Spear REIT.
“This bodes well for gross rental growth of existing CBD office properties, which could be as high as between 10 - 12 %, helping to offset the pain of rising operating costs and local authority charges.”
According to the SAPOA Office Vacancy Report for Q4 2025, released in January 2026, the national vacancy rate declined to 12.8 %, the lowest since late 2020.
Cape Town continues to outperform other metros, with vacancies at 6.1 %, while Johannesburg remains elevated at 15.8 % and Durban at 12.1 %.
Like Rossi, Kane welcomes the reduction in C grade offices due to the conversion to residential as it stimulates retail in the city and extends retail hours into the night.
According to Rossi, mixed-use developments boosts the retail sector in town.
Mixed-use developments include the conversion of old buildings, such as the current redevelopment of the iconic Golden Acre on Adderley Street, as well as the new build of One on Bree Tower, a 131-m mixed-use skyscraper on the Foreshore’s Bree Street.
“This will help grow the live, work and play offering that is much needed in the CBD to make it a seven-days-a-week trade market versus the current five-days-a-week scenario,” he said.