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Billions for new mixed use precinct in Cape Town

Oct 07 2016 18:16
Carin Smith

Cape Town - Partnership remains key for successful Marriott developments, not just in Cape Town, but the rest of Africa, Marriott International CEO Arne Sorenson told Fin24 on Friday.

"We never do it alone," he said about a R2bn joint venture with South African Amdec Group for the development of three new hotels in the Cape Town CBD.

Amdec understands South Africa and developments in this market," he said.

"We think we can do extraordinary things here. It is about taking care of our customers so they come back again and again. We see eagerness in the local hotel industry and that creates an optimism about the future, especially regarding job creation. We are honoured to be part of this growth."

To him the investment is a sign of the confidence Marriott International and the Amdec Group have in the South African tourism and hospitality sector.

Marriott International is a US-based company with more than 5 700 properties in over 110 countries. It operates and franchises hotels and licences vacation ownership resorts. It has recently completed the acquisition of Starwood Hotels and Resorts, which has increased Marriott’s distribution in Africa even more.

Marriott International’s portfolio, therefore, now includes the Ritz-Carlton, St. Regis, Bulgari Hotels & Resorts, JW Marriott, The Luxury Collection and W Hotels, Westin, Renaissance, the Autograph Collection, Moxy Hotels, AC Hotels and Aloft. Premium brands like Marriott Hotels and Sheraton anchor the portfolio. The first Marriott Hotel in sub-Saharan Africa recently opened in Kigali, Rwanda.

The Amdec Group is a South African privately owned property development and investment business specialising in new urban lifestyles.

Details of the new hotel investment in in Cape Town - totalling about R2bn - were announced at a briefing on Friday - at the site of one of the new hotels.

Three new hotels

The first Marriott Hotel in Cape Town will have 200-rooms and be situated in the current Culemborg precinct of the CBD. It will form part of a large project named Harbour Arch - based on the type of development like Melrose Arch in Johannesburg. The 150-room Residence Inn by Marriott - described as an upscale extended stay brand - will also form part of this large development. It will be the first under this brand in SA.

The first building of the Harbour Arch development is expected to be completed in about three years' time.

The third new hotel will be the 189-room AC Hotel Cape Town Waterfront, which will be located at The Yacht Club in the Roggebaai precinct on the Foreshore. It is described as an upper-moderate tier lifestyle hotel. It is expected to be completed within the next 20 months.

The R2bn investment is expected to provide employment for more than 5 000 people during the construction period and will employ close to 500 people on completion.

READ: Marriott expands portfolio

Sorenson described Cape Town as a "jewel" that more and more travellers around the world are interested in visiting - not only for its physical beauty, but also for its rich culture and history.

"We are making these investments with an eye on the next ten to twenty years. We believe the story of SA is about beauty, liberation and commerce," Sorenson told Fin24.

"Globally the middle class is growing. About 1.5 billion people have joined the middle class in the world and hundreds of millions of them will want to travel."

Giant step forward

Alex Kyriakidis, Marriott International's president and managing director for the Middle East and Africa, said Marriott's investments in Cape Town is "another giant step forward" for the group, not only in South Africa, but on the continent of Africa. He pointed out that Marriott's acquisition of South African group Protea Hotels was a major milestone in its African expansion.

According to Kyriakidis, South Africa's tourism industry has enormous potential and it is Marriott's mission to help enable the realisation of this potential.

"We see it as part of our responsibility in countries where we have a presence to stimulate tourism as much as possible. This is done by leveraging our millions of loyalty members worldwide. We are keen to promote SA across our entire loyalty network," said Kyriakidis.

READ: Marriott International rapidly expands across Africa

Mixed use precinct

James Wilson, CEO of the Amdec Group, told Fin24 that the larger Harbour Arch development in Cape Town will be about a ten year project to complete and involve an investment of about R8bn.

"The Harbour Arch development will be highly visible and create a precinct in itself at the accessible gateway to the CBD. It will be a mixed use precinct and include residential apartments, gyms, hotels, offices and restaurants," said Wilson.

"It will be vibey, hip and happening for young professionals."

Wilson added that real estate is a long term investment. That is why Amdec looks beyond short term crises.

"SA is a very robust country and we are optimistic about it," he added.

Alan Winde, Western Cape Minister of Economic Opportunities, said the joint venture by Marriott and Amdec shows the importance of partnerships.

He joined Sorenson in emphasising the importance of direct international flights to the Mother City. That is one of the reasons for a visit by Cape Town mayor Patricia de Lille to the US.

Tim Harris, CEO of Wesgro, the official tourism, trade and investment promotion agency for Cape Town, told Fin24 the Marriott investment is a vote of confidence in the Cape. He especially sees the potential of the Marriott loyalty membership of importance and added that Wesgro has had a long term relationship with Marriott.

"Cape Town is the hospitality centre of Africa and that brings great positioning for us," said Harris.

Read Fin24's top stories trending on Twitter:

marriott  |  cape town  |  africa  |  hotels  |  travel and leissure  |  tourism
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