Urban upgrade: 'regeneration effective.

Posted On Monday, 17 March 2003 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Urban upgrade: 'regeneration effective, particularly when government collaborates with the private sector'.

Bill RawsonTake advantage of tax relief, say experts GRAHAM NORRIS Property Editor LEADING figures in the property industry have urged developers and local authorities to take advantage of the government's offer of tax relief for organisations involved in urban regeneration.

The proposal, announced in Finance Minister Trevor Manuel's Budget speech, will allow taxpayers involved in upgrading under-utilised designated areas a 20% straight-line tax allowance for five years.

If they actually build a new residential or commercial building they will be allowed a 17-year write-off period with a 20% write-off in the first year and a 5% write-off per annum thereafter.

Thirteen areas have thus far been designated for possible assistance, including parts of Durban, Port Elizabeth, Johannesburg and Cape Town, but the proposal makes it clear that any urban area with a high population carrying capacity or any CBD that has gone downhill or, indeed any area suitable for development as an urban transport node, could be considered for tax relief.

Rawson Property Group chairman Bill Rawson has urged local authorities and developers to get together to ensure that areas suitable for regeneration, but as yet undesignated, are now considered by the government body that will be handling these matters.

Rawson said: "The assistance offered by the government could make a very big difference and it is undeniable that certain of our urban areas badly need this help. "However, it is likely that many of those involved here will be newly empowered companies from previously disadvantaged backgrounds and that the return on the investment will be slow.

It would appear, therefore, that the tax relief should be supplemented by up-front soft loans from the government if it is to have any real effect." He added that it was not yet clear to him where the government would draw the line between conventional maintenance or development work, which in many instances is 100% deductible in the first year, and urban renewal upgrading.

The experience in many big American cities, particularly Atlanta, had shown that urban renewal is possible no matter how low standards have slipped, and no area should ever be written off. "That was the previous government's big mistake in District Six.

Today, areas such as the Waterfront, Bo-Kaap and Westlake have shown just how effectively regeneration can take place, particularly when the government collaborates with the private sector." Ian Slot, chairman of Seeff Western Cape's licensees, encouraged investors and developers nationally to make full use of the opportunities opened by the urban renewal plans.

On the day of Manuel's address, Slot said, several buildings in Johannesburg's CBD were auctioned, some of them for as little as 5% to 10% of their replacement cost. "These tax incentives go a long way to contributing to favourable investment environments in the earmarked areas, but only if developers, investors and agencies take up that challenge and start doing some homework," he said.

"Manuel's steps contain an implicit commitment to address problems of bureaucracy and lack of capacity at local government level. It is up to agencies, developers and investors to hold local government to these national plans.

"We are ideally positioned to add substantial value to urban renewal projects and new developments alike. We prefer where possible to be a part of the whole process.

"As a direct result of this approach, 20 out of 22 lofts released by us in December in a building in Cape Town's CBD were sold in a matter of weeks."

Last modified on Tuesday, 27 May 2014 10:53

Most Popular

Residential sectional title sales again on the rise

May 27, 2021
Over the past 15 years, the sectional title market in South Africa has become entrenched…

Ongoing property market uncertainty makes the right finance partner key to extracting value

May 26, 2021
Claire Denny
Results from the listed property sector in 2020 showed property values reducing by an…

Pick n Pay and Fortress co-invest in a super distribution centre development

May 26, 2021
Fortress REIT announced that their biggest logistics development to date was signed with…

Exemplar REITail declares final dividend of 49.07 cps and announces 100% distribution

May 25, 2021
Mall of Thembisa
Rural and township retail specialists, Exemplar REITail, have declared a final dividend…

East Rand Mall will soon deliver the first phase of its major taxi rank upgrade

May 26, 2021
Phase 1 upgrade to the taxi rank at EastRand Mall
The first-phase upgrade of East Rand Mall taxi rank in the retail heart of Boksburg,…

Please publish modules in offcanvas position.