Citiq recently turned its attention to the underserved student accommodation market, which it sees as a strategic growth area. "The demand for quality student accommodation is enormous," Citiq CEO Paul Lapham said on Friday.
The silos, estimated to be about 50 years old, are prominent features of the Johannesburg skyline to the west of the M1 highway and have been unused since the late 1980s.
The first set of silos is under construction and is expected to be completed by the end of this year.
Mr Lapham said it would accommodate 320 students and would integrate shipping containers into the overall structure.
One of the pipes would be used as a staircase with a lift shaft and a fire escape, while another would be used to create 10 floors for study areas, libraries, lounges, computer rooms and recreational facilities. On each floor, he said, there would be 12 apartments as well as communal kitchens and bathrooms.
The total cost of the land and redevelopment of the first set of silos was about R31m.
Construction of the second set of silos is scheduled to begin next year. Citiq is considering converting these silos into residential units and higher-end student accommodation. Citiq has recently focused on innovative construction projects and experimenting with alternative, cost effective building methods. Last year, it built a residential apartment block made almost entirely from recycled shipping containers.
Arthur Blake, MD of Citiq's development division, said the group's work, along with Atterbury's mall and office development also in Newtown, was "uplifting this area".
If the silos had not been regenerated, they probably would have had to be demolished.
Citiq was in negotiations to purchase a number of other buildings in the Newtown precinct.
Meanwhile, JSE-listed property groups Premium Properties and Octodec Investments are targeting office-to-residential building conversions in Gauteng's central business districts. The aim is to take advantage of the influx of young professionals and university students into city centres.
Anthony Stein, financial director of both Premium and Octodec, said last month that the two companies had invested "in excess of R1bn on upgrades and redevelopments of properties in Johannesburg's and Pretoria's central business districts over the past few years". With many businesses leaving city centres about 15 years ago, Premium and Octodec saw the opportunity to convert vacant offices into residential units and this had been successful.
Mr Stein said the apartments were targeted at middle-income earners and were secure and clean buildings of a "decent quality". The group had converted 21 buildings in Pretoria, with about 150 to 250 units in each building.
The buildings were 100% let and "the demand is extremely strong", driven by a growing student population and professionals.
Premium and Octodec had completed 12 conversions in Johannesburg. Though there was a large amount of supply of new residential units, it was a sizeable market "and the potential is big", Mr Stein said.
"We've got a big housing problem in this country. There's an undersupply of accommodation in places that are close to major centres," he said.