Retail, BPO, and financial sectors see surge in new businesses opening doors in 2023
November marks National Entrepreneurship Month across the world, including in South Africa, an opportune time to spotlight how businesses, entrepreneurs, and small businesses contribute to the Cape Town economy.
According to Rob Kane, chairperson of the Cape Town Central City Improvement District (CCID), as one of the most popular tourist destinations in the world, Cape Town and its CBD offer a dynamic economy for business investment and a fertile environment for innovation and entrepreneurship.
“The city centre, what Capetonians call ‘town’, is an excellent place in which to establish a business. Research shows that business is booming in the 1.6 km² area of the Cape Town CBD in which the CCID is mandated to provide services that enhance those offered by the City of Cape Town,” says Kane.
Citing data from the State of Cape Town Central City Report 2023: A Year in Review, the CCID’s award-winning annual report on the CBD economy, Kane reveals that the number of businesses that call the Central City home increased to 3 302, with 186 new businesses opening during 2023. Growth was experienced in 10 of the city’s 17 business sectors during 2023.
“Certain economic sectors flourished while others remained resilient in the face of economic headwinds,” he explains. “The ongoing renaissance of the CBD also saw growth and investment in its residential and commercial properties. This attracts more people to the city, benefiting inner-city businesses.”
One of the CBD’s dominant business sectors, the retail industry, increased its footprint by the broadest margin to 1 305 businesses, with 62 new retail outlets opening in the CBD during 2023.
A quarterly Business Confidence Index, conducted by the CCID, shows a rise in confidence, with most retailers satisfied with trading conditions in the CBD. Half of respondents believe that business activity has fully recovered from the pandemic, while 44 % say it has almost recovered.
During 2023, general corporates and head offices increased their presence in the Central City by 36 new businesses to total 108, while ICT, telecoms and call centres grew by 28 new entities to 106. Cape Town’s CBD is favoured as an offshore business process outsourcing (BPO) destination, making up 42.9 % of the Western Cape’s BPO market.
Kane says: “The influx of BPO institutions has secured Cape Town’s status as the digitech hub of Africa and a leader in African BPO innovation. Along with government investment, the City of Cape Town is driving job creation through its strategic business partner, CapeBPO.”
In the CBD, the financial sector, including investment, insurance and banking, expanded from 171 entities in 2022 to 190 in 2023, with the Foreshore attracting most of this growth.
Another highlight from the report was the influx of 19 new artistic studios into the Central City during 2023, with 43 studios currently making their home in the CBD.
Says Kane: “There is a vibrant art culture in town, with many top tier galleries. In addition, it is the seat of the country’s Iziko South African National Gallery and the annual Investec Cape Town Art Fair, which is Africa’s largest art fair, attracts local, national and international visitors to the CBD.”
The CCID partners with the City of Cape Town and the South African Police Service (SAPS) to provide enhancing and supplementary services in the areas of safety, cleanliness and social development in its geographical footprint. It also promotes business and property investment in the Central City to ensure it retains its status as the most economically sound city centre in the country.
With its high occupancy rates, healthy property market, thriving economy and iconic beauty, Cape Town exemplifies what can be achieved through a successful private-public partnership.
“Given the Central City’s growing consumer base, coupled with a vibrant mix of retailers and businesses, successful trading conditions in the Central City, which have characterised 2024, look set to continue in 2025,” concludes Kane.
