As the coronavirus pandemic wreaks havoc on the global economy, Cape Town developer, property owner, and CCID chairperson Rob Kane answers five questions about how the Mother City’s CBD will weather Lockdown and its aftermath.
1. What are your views on the lockdown and the impact of the coronavirus pandemic on the economy?
I think we need to distinguish between the economic effects of Covid-19 and the nationwide lockdown enforced by the Government. There is no doubt that Covid-19 will be tough on us – as a local economy, as a nation, and as a world population. Just how tough remains to be seen. Who could ever have imagined we would be in Lockdown a few weeks ago? We need to be very grateful to the Government for its foresight and determination to "flatten the curve".
Lockdown is the only proven way to ameliorate the tide of infection we are facing. If we all play our part and abide by the rules, we can manage the virus and minimise the effect on our economy. So often in situations like this, there is a lot of finger-pointing, with people saying, “They must do this, they must to that”. Well, we are all now the “they”.
We all need to play our part and shame on those who don’t! It seems like yesterday when we had a water crisis – and look how well Cape Town responded to calls from the City of Cape Town to save water.
2. Many small businesses have been plunged into crisis by the lockdown and its extension. What are your views?
While we understand and support, the need to extend the lockdown to the end of April, the impact on the economy is severe. Retail tenants are simply unable to trade, and office users are working but, in most instances, at a reduced output. This will inevitably affect lower-income workers to a greater degree. The struggle for all of us (property owners and tenants) is to keep one’s business running through Lockdown.
The perception that property owners should absorb most of the pain is ill-conceived. Property ownership is in itself a business with similar obligations as that of a tenant viz, the payment of salaries, rates and taxes, utility bills, bank mortgages, and the like. If tenants cannot or choose not to pay rent, it puts huge pressure on landlords. If everyone is prepared to accommodate each other we will all survive this crisis. If a particular sector of the business community elects to be selfish, it may well have a domino effect.
3. What will it mean for investment in the CBD?
I am concerned for investors in the CCID Area and Cape Town’s CBD, but I am just as concerned about the tenants, the homeless, and South Africans as individuals. None of us will be spared from the effects of the virus – regardless of where we are located.
As is so often the case in a crisis, it will be our lower-income earners that will be the hardest hit. To this end, those in more fortunate positions need to assist others. I have lived and worked in 15 countries over my career and one thing I do know is this: South Africans have an ability to work together and a way of knuckling down when we need to. We need to show that mettle now.
4. Can you predict how the property market will be affected?
The effect of the coronavirus will trickle down to every corner of the economy and the property market will be no exception. However, I have been in business for many years and have survived the following: three stock market crashes – in 2001, 2007, 2011; oil at $150/bbl in 2008; oil at $25/bbl in 1998; the Rand at 22:1 (about seven years ago); the DotCom crisis in 2000; the Asian crisis in 2007; Swine Flu; Ebola; Aids and so on.
My point is that this is a tough one for us to deal with as a city and as a nation. We will survive this virus, but we need to fight our way through the problem and that means working for the common good of all.
5. How do you suggest the Government handles the end of Lockdown? Limited access to retailers, limited trading?
The lockdown has bought time for the Government to ready its health system to cope with the virus. We now need to trust that this preparation time has been well spent and we have the facilities to cope with many South Africans who are contracting and will contract the coronavirus. It appears that most of us will contract Covid-19 at some stage, so there is little point in remaining in an extended lockdown.
It may be more sensible for the Government to allow a business to resume (with appropriate social distancing) and to then impose selected lockdowns in hotspots when they appear.