Finance Minister Trevor Manuel has offered the property sector a boost by
allowing qualifying developers and owners in specified areas an opportunity
to write off the refurbishment costs of obsolescent buildings over five
years, and the development costs of new properties over 17 years.
Jonathan Smith, director of property strategy company Courtwell Consulting,
says the efforts of such developers will have to address security concerns,
as the areas targeted for economic rejuvenation include many regarded as
dangerous.
Furthermore, specified areas, which include parts of Ekurhuleni (greater
Germiston), parts of Johannesburg, Tshwane, Cape Town, Durban, Welkom and
Witbank, could be suffering from general urban decay, including poor
facilities, altered commuter patterns and a marked decline in economic
activity associated with central business districts.
"All this suggests that the committees proposed by the minister's financial
plan will have to devise infrastructural, ecological and population
development plans to make the initial cash investment required of developers
a viable investment."
Smith says the nodes requiring renewal need both innovative capital
investment and infrastructural and social improvement.
"It requires co-operation between government and property investors,
probably through mechanisms already used during the implementation of the
business improvement districts, but with more emphasis placed on social
planning," says Smith.