Jozi's inner-city renewal on track
Johannesburg's CBD, Braamfontein and Newtown nodes are showing significant evidence of inner-city renewal, with business sentiment and perceptions of the areas improving over the last couple of years. This is according to the research conducted by Broll, one of Africa's leading commercial property services group into the CBD and its immediate surroundings.
Huge transformation is underway in the Johannesburg CBD, Braamfontein and Newtown, fuelled by a number of new and re-developments, as well as the generally good accessibility to highways, rail and bus transport. The city can now be compared to many international cities, due mainly to the work of the City of Johannesburg. For instance, the Urban Development Zone (UDZ) for the City of Johannesburg, which covers an 18km² area east-west from Fordsburg to Jeppestown and north-south from Bellevue to the M2, has contributed R8 billion to Johannesburg's CBD.
The UDZ tax incentive is part of a national scheme to encourage inner-city renewal across South Africa. It offers tax allowances covering 100% of the total cost of property refurbishments over a period of five years, while new property developments can claim the allowance over 17 years. A number of projects are currently either nearing completion or underway, and will continue to contribute to the transformation of the area. This includes a joint Johannesburg Development Agency (JDA) and Central Johannesburg Partnership (a private, non-profit company) project to establish City Improvement Districts, which have taken off particularly in Western Johannesburg, in the Fox and Rissik Street areas.
CIDs are designed to improve services in specific areas. They are geographically-defined areas where property owners agree to pay additional levies for enhanced services, which usually include additional safety, cleaning and general maintenance of the area," Khojane explains. "In Western Johannesburg, which houses more corporate offices, landlords pay their CID levies more readily, and therefore the improvement in this area has been most pronounced.
Various projects, including the development of Ellis Park, Joubert Park, Gandhi Square and the Braamfontein Corporate Precinct, the upgrading of Main Street, the Johannesburg Art City Project and research into the possible establishment of a fashion and garment manufacturing node have contributed to this transformation.
The JDA has played a crucial role in these projects, aided by the Johannesburg Land Company. Not that the other areas are standing still. On the eastern side of the CBD, the expansion of Absa's head office by 50 000m² has had the side-effect of upgrading the area. Similarly, the gradual re-development of Newton on the western side of the CBD has attracted an influx of aspiring artists, musicians and actors. This has created what has become known as the cultural hub of Gauteng, and is supported by the City of Johannesburg Metropolitan Council.
Gauteng province is also involved in this area, in the hope of attracting more creative industries and has upgraded the Nelson Mandela off-ramp and the Mary Fitzgerald Square to support this initiative. The latter project is funded by the JDA to the tune of R10 million and will be completed by end July 2011. A further 35 000m² of retail space, called the Potato Sheds, as well as the 7 800m² Majestic office complex, of which The Majestic Hotel will be the last phase, are being developed in Newtown.
Braamfontein's redevelopment has centered around Wits University's students, with 20 buildings being converted into student accommodation over the recent years. However, Joy Coplan area specialist and commercial broker at Broll says, "Braamfontein stands a good chance of increased commercial development when the Gautrain station has been completed. Demand for space remains average, as do sales, but supply is on the increase and is not likely to change. Rentals vary from R65/m² in Newtown to R82/m² in Braamfontein. Most new leases are with government, which remains the main driver of additional take-up of space."
Keke Khojane is the area specialist and commercial broker from Broll.
Article by: Keke Khojane - www.realestateweb.co.za