Changing times: When a premium brand, such as City Lodge Newtown, leaves a historic CBD site, it usually points to deeper issues. Photo: City Lodge
The City Lodge Hotel in Newtown, Johannesburg, has closed after just over a decade of being in business and on 25 March Broll Auctions and Sales auctioned the building.
The property will be sold vacant, with the lease terminating at the end of May 2026.
On paper, nothing about the property sounds like a failure.
It was developed by Atterbury in 2015 at a cost of about R146 million. At the time of opening, the three-star hotel was the City Lodge Hotel Group’s first hotel in the Johannesburg CBD and the first big branded hotel to open in the city centre in more than two decades.
It has 148 rooms, a restaurant, two boardrooms, a gym, a pool and 55 basement parking bays.
The City Lodge group is hardly struggling. The brand has been operating for more than 40 years and runs nearly 60 hotels across South Africa, Namibia, Botswana and Mozambique.
At the time of the opening, James Ehlers, the managing director of Atterbury Property Developments, said: “Newtown Junction’s hospitality offering has been upped significantly with the opening of the new City Lodge Hotel.
“The hotel, together with Newtown Junction’s exciting new restaurants and leisure offerings, elevates it as a hotspot in the CBD for shopping, business and tourists too.”
When asked about the closure, City Lodge said the decision not to renew the lease was unrelated to staff performance, the brand or the broader Johannesburg market.
Yet today, the reality is that the hotel stopped making money.
Respectfully, the area around the hotel is completely different from what it was in 2015 and so is the sentiment about the future of the precinct. The city has changed.
Over the past few years, I have spent a lot of time touring hotel developments, speaking to developers and operators and presenting on the state of the hospitality market in South Africa. One pattern keeps coming up in Johannesburg.
People fly into OR Tambo, the busiest airport on the continent but they are not staying in the CBD. They are not staying in the old regeneration zones either. They are going to Sandton, Rosebank, Melrose, Waterfall and Fourways. Johannesburg remains a business city before it is a leisure city.
That means hotel demand is driven by corporate travel, conferences, consulting teams, financiers, engineers, project managers and executives flying in and out for short stays. These are high-frequency travellers with high expectations and they choose convenience, security and reliability first. This is why we are not seeing a wave of new hotel construction in Johannesburg in the way we see in Cape Town.
Instead of building more, operators are refining what exists. They are upgrading, repositioning or walking away from locations that no longer work.
Newtown is a good example of how fast a node can rise and fall. With so many developers and stakeholders driving the urban regeneration of the precinct, it is sad to see the vision not succeed.
There was a time when Newtown was spoken about as the future cultural heart of Johannesburg. The precinct received major public investment. There were theatres, museums, offices, student housing and big plans for urban revival. A hotel in that location made perfect sense at the time. But cities do not stand still and neither do travellers.
Today, most visitors want to be close to major business nodes, shopping centres, medical facilities and transport routes. They want predictable power, working traffic lights, visible security and walkable environments.
Whether we like it or not, those boxes are easier to tick in Rosebank than in parts of the inner city. The changes have changed where hotels will survive.
The closure of City Lodge Newtown is not an isolated event. It forms part of a broader reshaping of Johannesburg’s hospitality map. We are seeing similar signals in other sectors too.
Another luxury iconic closure not too far from this hotel was the landmark BMW, which closed at the end of February 2024.
Legacy Motor Group, which operated the dealership, said the location was no longer financially viable due to market conditions and operational challenges.
When a premium brand leaves a historic CBD site, it usually points to deeper issues — foot traffic, security, customer base and infrastructure stability all play a role.
High-end operators leaving often means property values follow.
The market is consolidating around fewer, stronger nodes, while older precincts that once held promise are struggling to keep up with what visitors, tenants and investors now expect as standard. And this is the part we should be paying attention to.
Hotels are one of the clearest indicators of how a city is really doing. Developers do not build them unless they believe people will come and operators do not stay unless the numbers work.
When hotels start closing in one area and opening or being renovated in another, it tells you exactly where confidence is moving.
The uncomfortable question is not why this hotel failed.
It is why, in a city that should be the economic engine of the continent, so much of the investment keeps moving further and further away from the centre?
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