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V&A shows double digit retail growth again

Cape Town - While 2014 was characterised by a slowdown in global economic growth, the V&A Waterfront in Cape Town has continued to buck the downward cycle with strong growth.

Its retail results for 2014 showed 19% year-on-year growth, when comparing 2014 to 2013.

On Thursday the V&A released results from an economic impact assessment undertaken by independent, third party economists from Stratecon (formerly EiS) for the financial period 2012 to 2014.

The research showed that the V&A has consistently maintained growth of over 10% in contribution to nominal gross domestic product (GDP) since 2002.

The report highlighted the V&A’s positive impact, not only on its immediate vicinity, but also on the Cape Town, the Western Cape and the national economy, with an estimated contribution to GDP of R259.1bn between 2002 and 2014.

The V&A has  contributed R33.4bn to nominal GDP in 2014, almost three times the R10.37bn contributed in 2002.

The V&A’s cumulative contribution to the provincial gross domestic product (GDP) since 2002 was over R227bn.

The 123 hectare mixed-use destination also reported a 19% increase in retail trade sales for 2014, marking four consecutive years of consistent growth since 2011.

Apart from being one of Africa’s most visited cultural and historical hubs, set on the edge of a working harbour, it offers a mix of experiences ranging from leisure, shopping and exclusive entertainment to prime residential and commercial property.

Up to 100 000 people visit every day during peak season. Total visitor numbers have grown to 24 million a year by 2014 (at year end).

International tourists account for 26% of all visitors and visits by locals increased to 58%, while 16% of visitors were from upcountry.

Of the total visitors to the V&A, 55% are Capetonians, 19% are South African and 26% are international. Visitor numbers to the Victoria Wharf reached a peak of 200 000 visitors on December 31 of that year.

Jointly owned by Growthpoint Properties and the Government Employees Pension Fund (GEPF), represented by the Public Investment Corporation Limited (PIC), the V&A Waterfront was developed in 1988 by the state-owned transport corporation, Transnet, while official commercial trading commenced in November 1990.

 (Source: V&A Waterfront)


READ:
V&A Waterfront project gets R1.5bn boost

Job creation

The V&A increased the total number of direct jobs created by 20%, growing from 16 155 in 2012 to 19 269 in 2014. Indirect jobs grew by over 30% to 16 894.

Since 2002, the cumulative number of total jobs created by the V&A in the province grew by just under 60%, from 22 645 to 36 162 in 2014. Nationally the number increased from 33 378 in 2002 to 52 676 in 2014, a 57% increase.

“Since 2002, capital expenditure has accounted for 3 922 additional jobs. A further 1 733 jobs have been created by operating expenditure at the V&A Waterfront Company, and the remaining 47 020 are from tenants,” said Stratecon economist Barry Standish.

CEO of the V&A Waterfront, David Green added that the increase in job creation over the past two years has come not only from the new developments underway, but also through the focus on fostering small business.

The increase in employment numbers furthermore ensures an additional contribution of R2.9bn in indirect taxes and R8.5bn to indirect household incomes.  

READ: V&A Waterfront wins for responsible tourism

Small business development

Small business tenants have grown from 140 in 2012 to 181 by the end of the 2014 financial year.

Green explained the focus on small business development is crucial for South Africa, because of its ability to create jobs, which in turn act as a catalyst for economic growth.

“We invested R50m in the redevelopment of our new Watershed. These businesses not only create direct jobs, but also impact the economy through the creation of indirect jobs, given the number of products sourced and produced locally. Its proving to be very sucessful and trading beyond expectations,” he said.

New development

The contribution to nominal GDP from future development is anticipated to be R29.9bn. This almost matches the nominal contibution to GDP of R33.4bn in 2014, and brings the cumulative contribution since 2002 to R223.7bn.

It is further estimated that the macroeconomic impact of development will translate into 17 806 additional national jobs in 2027.

The increase in the economic contribution of the V&A Waterfront is the result of an increase in the development of additional buildings like the new Silo District that currently consists of the award-winning No. 1 Silo commercial building and the No. 2 Silo residential complex.

Construction on the final phase of the R1.5bn Silo District development is underway. Once converted, the old Grain Silo will house the Zeitz Museum of Contemporary Art Africa (Zeitz Mocaa).

The new No. 3, No.4, No.5 and No.6 Silo buildings will introduce over 35 000m² for new corporate offices, a health club, a residential development and a mid-range internationally branded hotel.

Earlier this week the V&A announced the redevelopment of the Kings Warehouse in the Victoria Wharf Shopping Centre. When it is completed later in 2015, the area will introduce a further 4 500m² multi-level retail space to accommodate Swedish clothing retailer H&M and a further 1 000m² to accommodate British toy store Hamleys.

“In 2014 the V&A Waterfront turned 25 years old, and the results of this study allow us to see what a catalyst this neighbourhood of the city has been for regeneration of the foreshore," said Green.

"All development has been based on creating a conduit between the citizens of Cape Town and the sea, while preserving the fascinating historical fabric of the area for generations to come."

ALSO READ: Swedish giant to open at V&A Waterfront



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