How data centres are reshaping the Western Cape’s industrial property landscape
The Western Cape is continuing to strengthen its position as a digital infrastructure hub, with major data centre developments in the pipeline. The proposed hyperscale data centres at King Air Industria near Cape Town International Airport provide a compelling indication of Cape Town’s future as an African data centre hub.
For the commercial and industrial property market, developments of this nature raise an important question. As data centres become an increasingly important part of the region’s infrastructure landscape, could they also influence demand for surrounding industrial land, warehouses and commercial space? At the same time, their substantial requirements place existing infrastructure under increased pressure. 3Cube Property Solutions examines Cape Town’s proposed data centres and their impact on the city and its property market.
Increasing demand for data centres
Demand for data centres is being driven by the rapid growth of cloud computing, artificial intelligence (AI), digital services and other data-intensive technologies. The rapid development and adoption of AI is particularly significant, as training and running increasingly sophisticated AI models requires substantial computing power and data storage capacity.
At the same time, businesses across industries are moving more of their operations and services online, while the continued growth of streaming, e-commerce and connected devices is adding to overall data consumption. Together, these trends are increasing demand for secure, reliable and high-capacity digital infrastructure, creating opportunities for data centre operators and increasing demand for strategically located sites with access to reliable power, fibre connectivity and other supporting infrastructure.
Growing investment in Western Cape data centres
The proposed King Air Industria development is not an isolated investment in the Western Cape. The region is attracting interest from other major data centre developers, including the Cavaleros Group and its Cosmas Data Cities development.
This broader investment activity highlights the growing appeal of the Western Cape as a location for large-scale digital infrastructure and reinforces the potential for data centres to become an increasingly important part of the region’s commercial and industrial property landscape. Together, these developments point to a growing need for strategically located land with access to the power, connectivity and infrastructure required to support the next generation of data centres.
King Air Industria highlights Cape Town’s growing data centre appeal
The proposed hyperscale data centres at King Air Industria highlight Cape Town’s growing appeal as a location for large-scale data infrastructure. For data centre operators, location is about more than available land. Reliable power, fibre connectivity, transport access and the ability to develop large-scale facilities are all important considerations. Cape Town’s established technology sector and growing demand for digital services add to its appeal.
The site specifically earmarked for the new data centres is particularly appealing because of its proximity to Cape Town International Airport and major transport routes. The wider King Air Industria precinct is designed to accommodate a range of industrial, logistics and data centre facilities, making it well positioned to support the infrastructure demands of a growing digital economy.
Following the Tribunal’s approval of the controversial land-use application, Sydney Holden, chair of the Cape Town Municipal Planning Tribunal, pointed out that the data centre would cement the city’s reputation as a “global, competitive and innovation-driven hub”. He also emphasised that the development would create downstream employment and contribute to improved digital infrastructure serving a variety of industries.
Could data centres increase demand for surrounding commercial and industrial property?
Data centres are highly specialised developments, but their presence has wider implications for the surrounding commercial and industrial property market. Large facilities of this nature require a range of supporting services, from security, maintenance and technical contractors to electrical, engineering and logistics providers. This could create additional demand for industrial units, warehouses and commercial premises in nearby areas as businesses seek to operate close to these facilities. Added to this is the fact that temporary storage, logistics and contractor space will be required during the construction phase. In short, data centres have the potential to strengthen the appeal of well-positioned industrial precincts in and around Airport Industria.
Infrastructure challenges that cannot be ignored
The proposed data centres have also raised concerns about the significant demands they could place on Cape Town’s existing infrastructure. Journalist Steve Kretzmann, writing for GroundUp, highlighted these concerns when reporting on the initial approval of the development, describing the proposal as two “massive water-hungry and energy-hungry data centres”.
One of the key concerns is water consumption. Kretzmann points out that the land-use, subdivision and consolidation application submitted by King David Country Club in support of the development does not specify the volume of water the proposed data centres would require. This is particularly significant given Cape Town’s history of water shortages and ongoing pressure on its water resources.
Energy consumption is another major consideration, with the proposed data centres expected to have an electrical demand of about 174MW. To put this into perspective, that is roughly equivalent to the average continuous electricity demand of more than 150 000 Cape Town households, based on an estimated household consumption of 800kWh per month. Opponents have also raised concerns around backup diesel generation, fuel storage, air pollution, noise and potential health impacts. These issues form a significant part of the objections submitted against the application and highlight the broader infrastructure considerations that accompany large-scale data centre developments.
Balancing opportunity with infrastructure demands
The development of large-scale data centres presents both opportunities and challenges for Cape Town’s property market. On the one hand, these facilities can attract investment, support job creation and generate demand for surrounding industrial and commercial space. On the other, their substantial requirements for electricity, water, land and supporting infrastructure mean that their impact needs to be carefully considered. For property owners and investors, the key question is therefore not simply whether data centres will come to Cape Town, but how their growth can be accommodated in a way that supports the wider commercial and industrial property market without placing unsustainable pressure on the city’s infrastructure.
Cape Town’s emerging data centre sector is likely to become an increasingly important part of the Western Cape’s commercial and industrial property landscape. 3Cube Property Solutions has decades of experience helping businesses navigate this landscape and finding tailored solutions for every business in need of commercial, industrial or retail space. Get in touch for more information.