City Lodge bows out of Newtown

TheCity 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.

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.

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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. Thecity 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.

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