Expatriates exposed to urban living overseas are increasingly taking up residence in Johannesburg’s inner city. The regeneration of the inner city is gaining momentum as private investors partner with the Johannesburg Development Agency (JDA) for the first time.
Private developers are trying to market the urban-living concept to locals. Eric Herr, a director at Propertuity, said at the IPD Property Investment Conference last week that convincing people that the inner city offered a safe lifestyle option was a challenge as “most young people have not been exposed to urban living”.
“In fact, a large portion of the current residential community are expats who have been exposed to this lifestyle overseas, making it a more natural adaptation,” Mr Herr said. To overcome a variety of challenges, Propertuity adopted “a neighbourhood approach to development”, in line with global regeneration models.
As plans to remodel the inner city take shape, the JDA is increasingly partnering with private stakeholders. Sharon Lewis, executive manager of planning and strategy at the JDA, an agency of the city, says the JDA in the past “felt very much alone” in its drive to improve rundown parts of the city. However, the process has become “easier” thanks to a wave of new stakeholders and investors targeting the city.
The JDA, which focuses on strategic area upgrades, recently introduced a new programme in which it partners with other investors who have identified opportunities in the inner city. Its co-investment agreements include one with the Braamfontein Improvement District, as well as one of Johannesburg’s biggest revival success stories —the Maboneng precinct on the eastern side of the city, being developed by Propertuity.
The investment in Maboneng, a mixed-use “creative” precinct with retail, residential, office and entertainment offerings, is focused on upgrading streets and sidewalks. Pam Golding Properties is marketing Maboneng’s residential accommodation and provides strategic guidance in the node’s development. Mr Herr says what separates Maboneng from other regeneration projects in the city is that its properties are owned by a single developer “whose focus is the upgrade of the entire area”.
“With over R350m secured in the past six months to expand on plans to grow the area, as well as a total of 38 buildings in the current Propertuity portfolio, the expansion is guided by a broader holistic vision that will retain the integrity of the vision for the neighbourhood,” he says. On the western side of the inner city, Newtown’s continued revival is expected to benefit from Atterbury’s Newtown Junction development — a mixed-use retail and business property under construction.
Paul Lapham, CEO of property group Citiq, which is converting Newtown’s old grain silos into student accommodation, expects significant spin-offs from Newtown Junction and says “hopefully Newtown will see the revival that Braamfontein has seen over the past three years”. Mr Lapham says while other parts of the inner city are experiencing a revival, it is not happening at the same pace as in the Maboneng precinct, Braamfontein and Newtown. Once the Rea Vaya bus service is fully operational, he says, “it will also have a big impact across the board”.
Property group Trafalgar’s MD, Andrew Schaefer, says residential vacancies in the inner city have reached historic lows, creating a new surge of investor interest. Mr Schaefer expects a new wave of demolition and rebuilding because properties suitable for conversion have largely been converted. In the listed property sector, Octodec Investments and Premium Properties have benefited from their residential investments in the inner city.
Ms Lewis says another sign of the momentum in the city’s regeneration “is the emergence of the tourism industry with a focus on the inner city”. She says there is growing interest from tour operators, including the introduction of City Sightseeing Joburg buses earlier this year.
Written by Nick Hedley, Business Day (24 July 2013 pg.4)