The Victoria & Alfred Waterfront, SA's most visited tourist destination, is holding up relatively well considering that about 40% of its normal foot traffic has disappeared over the past 15 months of lockdown restrictions.
The property, which is jointly owned by JSE-listed Growthpoint Properties and the Public Investment Corporation, has had few casualties among its retail tenants, with vacancies sitting at only 2%, and none of its big office users have left, even though some had options in their contracts to let go of space. And no hotels in the precinct have closed permanently.
Explaining this resilience, David Green, CEO of the V&A, said this week the waterfront is an "internationally recognisable brand which has maintained its differentiation through continuous investment to differentiate". He said this is "borne out in the number of projects" the V&A has brought to the market and "what we have in the pipeline, which gives confidence to the precinct".
That is not to say it has not been difficult as about 10 of the 80 restaurants at the waterfront have permanently closed, and the V&A has also offered substantial rental relief to small tenants at the property. In addition, the V&A has assisted the multiple hotels operating at the precinct with relief over the lockdown period.
Green said he believes the worst may now be over, provided the latest level 4 lockdown does not "continue for too long".
The number of visitors annually
to the V&A Waterfront, in
pre-pandemic times
— 26-million
He said the V&A is focusing on future growth potential by proceeding with plans to increase the number of marine berths for boats and superyachts.
It is also continuing with its commercial development programme, which includes finalising the new Cape Town offices of Investec by the end of 2022 and taking advantage of the lull to maintain and improve infrastructure.
The V&A, with 500,000m2 of developed property including 15 hotels, 450 shops, 80 restaurants and 120 office tenants, usually receives about 80,000 visitors a day during the peak tourist season and 26-million visitors a year.
But Green said foot traffic has probably fallen by about 40% over the past 15 months as international travel virtually ceased. Overseas tourists make up 27% of visitors, and visitors from the rest of Africa make up about 15%.
However, with vaccination programmes gaining momentum around the world and in SA, foot traffic will improve as people start to feel safe again.
With this in mind, Green said, the V&A decided to continue with its growth plans including launching what it calls its kitchen incubator and food market in the V&A's cruise terminal during 2020.
The hub is aimed at showcasing and supporting local food businesses which draw foot traffic from the cruise ships docking at the terminal.
According to the V&A's biannual economic impact assessment report released this week, "over the past four years, average annual spending from cruise liners has grown by 45%" and between 2017 and 2020 the Cape Town Cruise Terminal contributed "cumulative expenditure of over R2bn" at the V&A.
Another focus is the ongoing development of an "additional 20 berths" at the marina from the current number of about 170, and seven berths for superyachts. Green could not yet confirm the time frame for the superyacht berths, but "we're closely tracking demand and are confident we could bring the space into play fairly quickly".
Hotels operating at the V&A are also optimistic they can recover quickly if level 4 restrictions do not continue for too long.
Sandra Kneubuhler, country director of sales in SA for the Radisson Hotel Group, said: "The V&A is the most coveted location in Cape Town and we have seen in the recovery from both the first and second waves that hotels in this location are the first to recover their occupancy levels. We anticipate that this will accelerate as international travel returns, which is also seen in future demand/booking trends."
Kneubuhler said "lockdown level 4 has significantly impacted hotel occupancies and the sooner this is lifted, the lesser the impact on the remainder of the year".
The group operates the Radisson Blu Waterfront and Radisson Red at the V&A.
Enver Duminy, CEO of Cape Town Tourism, said visitor numbers are down across the board, but when it comes to the V&A and other "big attractions in the Mother City", domestic travellers are "taking a keen interest in these attractions right now".
"We are hopeful that numbers will pick up soon again," he said.
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