Bellville CBD BRE Final Report
- 1. 1 Bellville Central Business District Business Retention and Expansion Survey Report to Stakeholders October 2015 A Partnership of the Greater Tygerberg Partnership and the City of Cape Town
- 2. 2 ACKNOWLEDGEMENTS....................................................................................................................................2 1.Introduction .........................................................................................................................................................4 2.Bellville CBD in context .....................................................................................................................................4 2.1Project intervention objective ............................................................................................................................4 3. Survey findings...................................................................................................................................................5 3.1 Business Structure and History ........................................................................................................................5 3.2 Employment Patterns ........................................................................................................................................6 3.3 Business environment ......................................................................................................................................9 3.4 Future plans....................................................................................................................................................11 3.5 General...........................................................................................................................................................14 4. Prioritisation of Issues ......................................................................................................................................16 5.Action Plan ........................................................................................................................................................18 6.Annexure 1- Priotisation of Issues.....................................................................................................................23 7.Annexure 2 – Prioritisation of Actions..............................................................................................................24 List of Figures and Tables FIGURE 1: MAIN ACTIVITIES (PRODUCT/SERVICES) OF THE BUSINESSES………………………………………………………5 FIGURE 2: BUSINESS BRANCHES…………………………………………………………………………………………….....6 FIGURE 3: LIFE SPAN OF BUSINESSES………………………………………………………………………………………….6 FIGURE 4: EXPECTED CHANGE IN EMPLOYEES COMPLEMENT OVER THE NEXT TWO YEARS…………………………………..7 FIGURE 5: FUTURE SKILLS RECRUITED VS. SKILLS BUSINESSES FIND DIFFICULT TO ATTRACT………………………………..8 FIGURE 6: TRAINING OF EMPLOYEES…………………………………………………………………………………………..9 FIGURE 7: FIVE MAIN ADVANTAGES OF RUNNING A BUSINESS IN BELLVILLE CBD…………………………………………...9 FIGURE 8: DISADVANTAGES TO RUNNING BUSINESS IN BELLVILLE CBD……………………………………………………..10 FIGURE 9: ITEMS BUSINESSES FIND DIFFICULT TO SOURCE IN THE BELLVILLE CBD………………………………………....11 FIGURE 10: BUSINESSES CONSIDERATIONS…………………………………………………………………………………...11 FIGURE 11: BUSINESSES PLANS FOR THE FUTURE…………………………………………………………………………….11 FIGURE 12: SALES AND BUSINESS OUTLOOK FOR NEXT 3 YEARS…………………………………………………………….12 FIGURE 13: MAJOR CONSTRAINTS TO EXPANDING BUSINESS IN BELLVILLE CBD……………………………………………13 FIGURE 14: FACTORS IMPROVING BUSINESS PERFORMANCE IN THE FUTURE…………………………………………………13 FIGURE 15: EXPERIENCES OF PROBLEMS WITH GOVERNMENT…………………………………………………………...…..14 FIGURE 16: EFFECTS OF LOAD SHEDDING ON BUSINESS……………………………………………………………………...15 TABLE 1: PRIORITY ISSUES IN THE BELLVILLE CBD………………………………………………………………………….15 TABLE 2: ACTION PLANS……………………………………………………………………………………………………..17
- 3. 3 ACKNOWLEDGEMENTS Local Sponsors A partnership of the Greater Tygerberg Partnership and the City of Cape Town Task Team Lamesa Modak Craig Kensley Ali Hassan Liesl-Ann Kenny Sarel Strydone Monique Muller Phumlani Ntsele Local Co-ordinators Lauren Uppink – GTP Girshwin Fouldien – City of Cape Town Facilitator Tim Hadingham – City of Cape Town Participating businesses SAMAN Centre Hopefully Houses Nani Salon Shibisg Cash & Carry A to Z Furniture Lovia's Hair Salon Titoow Trading Zita Beauty Hair Salon Sistahood Hair & Beauty Salon Sudani Trading cc Sheet Street Relabelled Albashir Clothing Shop Qorilow Jackson Ibrahim Take-away Blue Cafe Shop GAB Consulting Bargain Shop SA United Bulk Distributors Café Mojo Amana Cash & Carry Wehliye Int Textile cc Beirowski Attorneys Radia's Take-aways Bellville Perfumes Borame Lodge Clicks Muller’s Optometrist Cell Expert Nedbank Freestyle Meat Crazy Vertigo Hair Salon Delights Wimpy Bellville Best Electric Best Fashion Hair & Nail Café Plaza Fast Foods Bellstar Music Clepy Fashion Design Genesis & Clinic Have-a-Bite Fast Food Brits Dreyer Inc. MSC College Samsa Trading cc Euro Fisheries Superior Cellular Cape Fashion L.C. Hill Optometrist Money Matters Star Shop Bellville Cycles Zircon Jewellery New Look Hair Salon Kingsway College Tyger Milling Music City cc Anzak Perfumes Hair Palace OK Furniture Calitz & Marias Mikrolening Urban Cell and Computer Good Hope Tyres Bridge Loans M&J Training Centre Bellville Electronics Repairing Northville Student Centre Accommodation Report compiled by: Michelle Joja and Sive Fana – Department of Economic Development, City of Cape Town Tim Hadingham – Department of Trade and Investment, City of Cape Town
- 4. 4 1. Introduction In May 2015, the Greater Tygerberg Partnership in collaboration with City of Cape Town and the Bellville central business district (CBD) business community embarked on a study to facilitate urban regeneration in the Bellville CBD. Drawing on the idea that the wisdom, knowledge, involvement and ideas of local business owners are critical to achieving a shared vision for the Bellville CBD, the Business Retention and Expansion (BR&E) project focuses on developing an in-depth understanding of the dynamics, challenges and opportunities presented by the Bellville CBD business environment. 2. Bellville CBD in context Bellville, which was originally known as "12 Mile Post" since it is located 12 miles (20 km) from the Cape Town CBD, was initially founded as a railway station on the line between Cape Town; and Stellenbosch and Strand. Since its founding Bellville has seen sustained growth to the point where it is recognised as Cape Town’s second CBD. The Bellville/ Tygerberg node is now the second biggest home major office, retail centres, business and commercial node of the City of Cape Town. The location of key medical institutions, such as Karl Bremer Hospital and Tygerberg Hospital, and prominent education institutions like the Cape Peninsula University of Technology and the University of the Western Cape, as well as location of the multi-purpose Bellville Velodrome and the prominent Tyger Valley Mall also contributes to the status of CBD to Bellville. The benefits of this growth have been inevitably offset by challenges such as increased levels of congestion, urban slums, illegal goods trading and a negative image of the area. 2.1 Project intervention objective The Greater Tygerberg Partnership in partnership with the City of Cape Town launched a business retention and expansion (BRE) study in Bellville CBD in 2015 with the objective of identifying and understanding the issues facing business in the Bellville CBD. To this end, the aims of the BRE study were to: Get a complete picture of the economic activities of the businesses in the Bellville CBD; Identify ideas, concerns, priorities and obstacles to retaining and expanding businesses in the area;
- 5. 5 Develop an action plan for problems, improvements, and opportunities; Build a broad-based partnership for implementation and sustained development; Enhance relationship between business and the wider community; and Inform policies and programmes more broadly. These aims were to be achieved by means of a survey of a representative sample of companies located in the Bellville CBD. A total of 71 businesses were surveyed out of a sample population of 700 businesses in the Bellville CBD. This translates into a 9.26% margin of error at a 90% level of confidence which is within the acceptable range for a survey of this type. This report presents an analysis of the findings of the survey, as well as a set of draft action plans in response to the issues emerging from the analysis. 3. Survey findings 3.1 Business Structure and History Reflecting the landscape of a traditional central business district, 60% of businesses surveyed were in the wholesale and retail sector, 23% of the businesses are involved in community or personal services, 9% of the businesses are involved in finance, insurance, property and business services, and 8% of businesses are in the businesses of catering and accommodation. Figure 2: Main activities (product/services) of the business Furthermore, the survey established that 85% of the businesses surveyed are locally owned businesses. Of those that are not locally owned, 59% of the businesses classified their business as a provincial company branches, 29% as national company branches, and 7% international company branches. 60% 23% 9% 8% 0% 10% 20% 30% 40% 50% 60% 70% Wholesales,rental, motor trade sector Community/Personal Services Finance,Insurance,Property Catering and Accomodation
- 6. 6 Figure 2: Business branches Thirty-eight percent of businesses in the Bellville CBD have been operating in the Bellville CBD for ten years and longer. Approximately 27% of the businesses have been operating in Bellville CBD between six and ten years while 35% of businesses are operating in the area for less than five years. Figure 3: Life span of businesses 3.2 Employment Patterns The 71 businesses surveyed employed a total of 558 people, 512 of which are employed full time and 43 are employed on a part-time basis. The average number of employees is 7.2 per business and the median is 5. Businesses were asked to predict, considering current patterns within their businesses, whether they expected any change in the number of people they employ in the next two years. This revealed a generally positive outlook with 43% of businesses anticipating an 59% 29% 7% 15% Provincial Company Branches National Company Branches International Company Branches 38% 27% 34% 1% 10 years and longer 6-10 years 1-5 years less than a year 85% 15% Locally Owned Businesses Not Locally Owned Businesses
- 7. 7 increase in staff complement, while 35% anticipated no change and 8% expected a decrease in employees. Figure 4: Expected change in employees complement over the next two years Reasons cited for the anticipated changes in the employment included: Business growth rates Seasonal trade Future plans for the business Sales prediction Competition On the question of what skills businesses anticipated they would require in the future, 45% indicated that marketing and its related skills would be needed. A further 23% of businesses surveyed indicated that they intend on recruiting professional services such as research, strategic, engineering, graphic design, business management and public relation skills. Fifteen percent of businesses interviewed indicated that they intended to recruit administrative skills such as clerical, word processing, excel capabilities and interpersonal skills. As would be expected from a business survey in a CBD, trade skills (6%) and technical skills (4%) were not in high demand. Increase in employment 43% No change 35% Decrease in employment 8% No Response 14%
- 8. 8 Figure 5: Future skills recruited vs. Skills businesses find difficult to attract The skills that business finds difficult to attract are also those that they are looking to recruit most urgently, with marketing and related skills being the most difficult to find (46%) followed by professional skills (20%), administrative skills (14%) and technical skills (11%). The technical skills that businesses have difficulty finding include nail and hair technicians. The majority (66%) of businesses surveyed primarily undertake employee development using an on-the-job training approach, while more formal approach are only used by a small proportion of businesses – internships (6%), learnerships (4%) and bursaries (3%). Fifteen percent of businesses do not provide formal training due to lack of funds, with the time consuming nature of training and the fact that their business operations not requiring skilled labour also being advanced as reasons for not investing in training. 16 25 48 4 6 14 20 46 11 9 0 10 20 30 40 50 60 Adminstrative skills Professional services Marketing and related skills Technical skills Trade skills Future skills to employing Skills businesses have difficulty attracting
- 9. 9 Figure 6: Training of employees 3.3 Business environment The decision to set up and continue operations in the Bellville CBD is informed by different factors for different businesses. Figure 8 below provides an overview of the five main advantages in as reported by business in the Bellville CBD. Figure 7: Five main advantages of running a business in Bellville CBD Fifty-nine percent of businesses consider reliable public transport as a key advantage of running a business in the Bellville CBD. Furthermore, 51% of businesses consider the physical location ideal for running a business. Forty-nine percent of businesses cite proximity to markets as an advantage to doing business in the area, while 49% of businesses regard customer loyalty as an advantage and 41% consider proximity to suppliers beneficial for their business. 66% 4% 3% 6% 15% 0% 10% 20% 30% 40% 50% 60% 70% Internal on the job training Learnerships Bursaries Internships No training 0% 10% 20% 30% 40% 50% 60% 59% 51%49%49% 41% 32% 25%23%20%17%15%15% 13%13%13% 10% 7%
- 10. 10 Disadvantages of operating a business s in the Bellville CBD include crime rates (76%), lack of parking (60%), rental costs (52%), the negative image of the area (46%) and slow growth rate in the area (25%). Figure 8: Disadvantages to running business in Bellville CBD Products and services that businesses find it most difficult to source in the Bellville CBD area are captured in figure 10 below. Figure 9: Items businesses find difficult to source in the Bellville CBD Despite the disadvantages listed by businesses in the Bellville CBD, the majority of businesses 71% have not considered relocating their businesses from the Bellville CBD, 0% 10% 20% 30% 40% 50% 60% 70% 80% 76% 60% 52% 46% 28% 25% 17% 15% 15% 15% 14% 14% 13% 11% 11% 10% Items that businesses find difficult to find in the Belville CBD. Food products Machinery parts Textiles Electrical Appliances Furniture Clothing Fabric Products (clothing, materials, catering, deco)
- 11. 11 closing or selling their business. Only 5% of businesses have considered closing their business, while 13% have considered selling their business, and 11% considered moving their business outside of the Bellville CBD. Reasons advanced for moving, selling or closing include crime and grime (40%), high rental (26%), and changing the focus of business activities (13%). Figure 10: Businesses considerations 3.4 Future plans Fifty-seven percent of businesses indicated that they envisioned change in their current business activities in the next two years. These changes include expanding their business (40%), modernizing their business (25%), adding production lines (7%), adding new service offering (4%) and enhancing their mix of goods and services (4%). Figure 11: Businesses plans for the future 71 11 13 5 0 10 20 30 40 50 60 70 80 None of the above Selling their business? Moving business out of Bellville CBD? Closing their business? 39% 25% 20% 7% 4% 4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Expand Modernise facilities No change Add production line Add services Change/mix goods/services
- 12. 12 Businesses surveyed projected an optimistic view of the sales outlook of their businesses with more than half (58%) anticipating that business and sales will improve in the next three years. Only 15% predicted a decline and 14% predicted that business and sales will stay the same in the next three years. Figure 12: Sales and business outlook for next 3 years The reasons for these outlooks include: Anticipated improvements in business and sales based on planned expansion of the business. An increase in the size of the consumer market due the proximity of tertiary education institutions and associated student accommodation, as well as the establishment of a new Home Affairs office. Both these factors bring additional feet into the area and expand the market for the goods and services offered by business in the Bellville CBD. On the other hand some businesses argued that the market was shrinking and that there was a marked decrease in customers in the area mostly due to increases in prices, the negative image of the Bellville CBD and high levels of crime. The high costs of doing business in the Bellville area as a consequence of high electricity costs, cost of living rises and high rental costs were cited as reasons for predicting either a decline or no change in business and sales for the next three years. The five main constraints to expansion were identified high levels of competition (62%), lack of adequate space (37%), small market share (37%), lack of finance (32%) and energy costs (30%). 58% 15% 14% 13% Improvement in Business and Sales Decline in Business and Sales Business and Sales will remain the same No Response 0% 10% 20% 30% 40% 50% 60% 70%
- 13. 13 Figure 13: Major constraints to expanding business in Bellville CBD Businesses identified improved staff skills (41%), new products (39%), better networking (28%), improved management skills (25%), and access to government incentives (18%) as drivers of expansion in the next twelve months. Figure 14: Factors improving business performance in the future 62% 37% 37% 32% 30% 25% 21% 15% 14% 13% 11% 11% 8% 7% 7% 7% 6% 6% 3% 3% 0% 10% 20% 30% 40% 50% 60% 70% 41% 39% 28% 25% 18% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Improved Staff Skills New Products Access to Networking Opportunities Improved Management Skills Access to Government Incentives
- 14. 14 3.5 General Business generally has a positive view of government with only 14% reporting that they have experienced any problems when dealing with government. Interactions with Department of Labour and the Department of Home Affairs with regards to work permits and issues with the municipality’s provision of services relating to crime and grime, parking, problem buildings and environmental problems were the most frequently cited areas in which business had experienced difficulty when interacting with government. Figure 15: Experiences of problems with government The 14% that have encountered problems with government departments elaborated that they have experienced problems with Department of Labour and Home Affairs with regards to work permits for their employees, while experiencing problems with local government with regards to. The interruption of an electricity supply in the first half of 2015 to avoid excessive load on Eskom’s generating capacity interrupted economic activity across the City of Cape Town. However, in the Bellville CBD, the majority (51%) of business were not affected by the load shedding. Twenty-eight percent of businesses were only occasionally affected, while 15% were moderately affected and 6% indicated that their businesses have been severely affected by load shedding. Yes 14% No 86%
- 15. 15 Figure 16: Effects of Load shedding on business Businesses that were affected by load shedding were in most cases forced to close their doors during load shedding to prevent criminals from entering, resulting in a loss of custom and revenue. Suggestion to reduce the impact of load shedding included doing it at night when they were not trading, and the rollout of sustainable energy infrastructure that could provide extra capacity in the system. Seventy-eight prevent of businesses surveyed were not affiliated to any business associations or chamber of commerce. Of those that were, 73% were members of the Somali Business Association. Furthermore the awareness of businesses in the Bellville CBD of the existence of the Greater Tygerberg Partnership is low with only 29% of businesses having heard about it and only 3% being members. 51% 28% 15% 6% 0% 10% 20% 30% 40% 50% 60% Not affected Affected occasionally Affective moderately Affected severely
- 16. 16 4. Prioritisation of Issues The results of the Bellville CBD BRE exercise were interrogated by the task team at a workshop on the 28th September 2015. Based on the results of the survey and the task team member’s knowledge of the area the following issues were identified and prioritised using a card exercise1 . Table 1: Priority issues in the Bellville CBD Issue Votes Cleaning up Bellville 12 More visible policing 8 Dealing with petty crime 7 Traffic management especially with regard to taxis 5 Dealing with negative perception of Bellville 5 Lack of parking in the CBD 4 Need to upgrade the transport interchange 2 Need for a business organisation 2 Business crime 2 Rental costs too high 1 Vagrancy 1 The workshop adjourned at this point and agreed to meet again on the 14th October 2015 identify actions and develop a draft action plan. The purpose of the workshop on the 14th October was to develop an action plan for the top priorities. It was agreed to address petty crime and the issue of visible policing as a single issue. 1 See Annexure 1 for the outcomes of the issue identification and prioritisation exercise
- 17. 17 Workshop participants brainstormed activities that were required for issues to be addressed and these actions prioritised using the PASTA process2 . Annexure 2 contains the outcomes of this exercise. 2 The question was asked is the action: Popular, Achievable, Short Term, Affordable
- 18. 18 5. Action Plan The following action plan for the four priority recommendations was developed using the PASTA technique. Priority actions are highlighted in blue. Those actions not highlighted in blue will need to be addressed but this will be done outside the BRE process by the relevant stakeholders. Table 2: Action Plans Priority 1: Addressing the Perceptions of Bellville Bellville seen to be characterised by urban decay and a degraded public realm The CBD is perceived (and experienced) to be unsafe These perceptions are held by both businesses and customers Activity Popular (Champion) Achievable Short Term Affordable Notes 1. Identify clusters of economic activity and use this to attract similar business and customers to the Bellville CBD. (GTP)) This work has already been started by the GTP. The action team would focus on understanding it and identifying further activities.
- 19. 19 2. Promoting Bellville as a positive brand a. Develop profiles of businesses that have been trading in Bellville for 10 years and longer b. Get positive stories about the Bellville CBD and activities that are taking place into the public domain c. Commission an influential blogger to write positive stories about Bellville life covering street fashion, food , campus life etc. (GTP) These three actions were grouped together as although they were different, they reflect a similar approach to telling the good stories about the Bellville CBD 3. Promote Bellville through events such as a Street Carnival and Open Streets GTP maybe 4. Upgrade existing infrastructure and amenities to improve the image of the Bellville CBD CCT X maybe
- 20. 20 Priority 2: Making a clean sweep Dealing with the litter problem Increasing the frequency of cleaning Improving the overall condition of the public realm Activity Popular Achievable Short Term Affordable Notes 1. Involve formal and informal business in cleaning the area and taking responsibility for the CBD. One possible way to do this is for the CCT and VRCID to organise a “Spring Clean Bellville” drive with business? (VRCID/ GTP) 2. Review of solid waste plan and educate the public and other stakeholders regarding waste management and disposal. (CCT) The action team should engage with the sub-council manager’s process around this issue that is currently underway with the aim of providing input on the needs of businesses in the CBD and the approach that would work best to tackle this issue. 3. The City must leverage its funding of existing organisations to get them involved in dealing with this challenge (CCT) X (maybe in 12 months)
- 21. 21 4. The VRCID must employ more workers to clean up Bellville and empty bins more frequently X (VRCID) maybe but would need more funds Priority 3: Tough on crime, tough on the causes of crime More visible policing is needed as a deterrent Petty crime such as gambling, mugging, drugs needs to be dealt with A forum must be established (SAPS, law enforcement, formal business, traders etc.) to identify and address the issues. This could be an existing for or could be the proposed action team itself. Activity Popular Achievable Short Term Affordable Notes 1. Establishment of a business WhatsApp group to provide information on incidents of crime (GTP) 2. Hot spots should be identified and monitored by law enforcement (VRCID) Information on the location of crime hotspots can also be provided to businesses so that they can warn their employees. 3. Recruitment criteria for VRCID security guards need to be made stricter to prevent collaboration with criminals in the Bellville CBD. (VRCID) At the very least recruitment criteria should be made public to reassure business about the integrity of the security guards. 4. Additional SAPS and Metro Police need to be deployed in the CBD maybe maybe 5. Open satellite police station at strategic locations X maybe
- 22. 22 such as the public transport interchange and the Middestad Mall Priority 4: Dealing with rogue taxis Taxis stop anywhere and make a major contribution to congestion in the area Endanger pedestrians Need to take a two pronged, “carrot and stick” approach Activity Popular Achievable Short Term Affordable Notes 1. Engagement with taxi associations (CCT) This is currently taking place. The focus should be on how taxi can self-regulate their behaviour, and how they can still maximise their passenger numbers without contributing to congestion and endangering other road users. 2. More enforcement and visibility (CCT/SAPS) X maybe This issue could also be picked up as part of the enforcement component of Priority 3.
- 23. 23 | P a g e 6. Annexure 1- Priotisation of Issues
- 24. 24 | P a g e 7. Annexure 2 – Prioritisation of Actions