A tale of two inner-city revivals

Posted On Monday, 17 November 2003 02:00 Published by eProp Commercial Property News
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The inner cities of Cape Town and Johannesburg are confident that the worst of times have passed and the best of times are yet to come. But that is where most of the similarity ends.

Trevor Manuel"Johannesburg is quite unlike most other South African cities – it is a landlocked city lacking any natural attractions and with no reason for its original establishment other than the finding of gold," says Central Johannesburg Partnership (CJP) executive director Neil Fraser. "Yet its sheer size and the creation of a huge infrastructure have turned it strategically into the most powerful city economy in the country and in Southern Africa." "Cape Town is unlike any other city in the world," echoes Louis Karol Architects CEO Louis Karol.

It is confined by the sea and the mountain and its natural beauty and its working waterfront attract millions of tourists a year.

The city is built on a history of doing things slowly, a philosophy of planting something, nurturing it and waiting for years for it to bear fruit.

These roots, their inhabitants and each city’s purpose means that their revival is unique, each happening in its own way and at its own pace.

"The ’60s to ’80s saw the focus on developing central business districts (CBDs) before it was realised that this was a mistake resulting in the development of sterile areas," says Fraser.

"Cities, by their very nature, are not CBDs, they are an amalgam of business, culture, sport, retail, residential, religion and government," he says.

The Central Johannesburg Partnership and its counterpart the Cape Town Partnership (CTP) have been laying the foundations of cleansing, safety and security and marketing that are attracting these functions back to the city centres.

Fraser says there is a definite revival of interest in living, working and playing in the inner city of Johannesburg.

On the one hand, property prices and rentals in the city are extremely low in comparison to most of the northern business nodes, providing an opportunity for investment and growth, while the focus on urban revitalisation provides evidence to would-be investors of the medium- to long-term positive prospects. Johannesburg remains a massive market for tenants; about 800 000 people enter the city daily, half-a-million people from other African countries come to the city each year for cross-border shopping.

Johannesburg is still the largest employment generator in Gauteng, while Cape Town is responsible for over a quarter of metropolitan formal employment.

"From a residential point of view, cities attract people who generally wish to live close to work in areas that are not sterile as is the case in many modern urban nodes," says Fraser.

Karol believes that a large element of attraction in the cities is the fun element.

Louis Karol associate partner Robert Silke believes that people’s variety of life since the decentralisation of the cities has deteriorated tremendously.

"Nothing is different any more; every mall has the same shops in it, and people are bored by Monday night television," he jokes.

"And it’s not that the city has to be too clean either, part of its charm is the unpredictability, the chance encounter, as you turn around a street corner, with something or someone that you never expected.

"Foreigners come to Cape Town because of the sunshine and the beaches and the mountain, but it’s also important that Cape Town is a place where people can have fun; it’s important that the city continues to offer a variety of things to many different people," he says.

Since the formation of the Cape Town Partnership four years ago the value of projects completed, planned or under way in the centre of Cape Town has reached R5,8-billion.

The partnership set a target of R1-billion for the entire 2003 calendar year, but in June new investments in the central city had reached more than R3,049-billion for the previous six months.

Notable investments include a number of leisure industry projects, inner-city residential conversions, new developments at the port and in the Roggebaai Canal Tourism Precinct.

A significant portion of investment has been in the historic core of the central city, particularly in the east and west cities, and the focus will continue in the east city where the Shuttleworth e-City project is to be established.

This urban renewal project envisages the creation of a cluster of new e-commerce businesses and entrepreneurs called incubytes.

"In Cape Town there is a return to living in the city centre, but I don’t think it is a return from the suburbs. There is just such a pent-up demand for accommodation because there is so little real estate," says Karol.

At a conservative estimate he says that, in the next five years, there will easily be 2 000 to 3 000 apartments available in the city.

In Cape Town’s largest-ever inner-city residential refurbishment, work has begun to convert the 63-year-old 18-storey Old Mutual building, in Darling street, into a sophisticated apartment complex of 178 units, with shopping outlets and restaurants.

The success of Mutual Heights, which captured the public’s imagin-ation and was sold out within days, has sparked more residential projects in the city centre.

"In our office alone we are looking at about 500 apartments," says Karol.

"They are all in the project stage, one is in the east city, the rest in the west city." Old Mutual Properties is planning to add nearby Cartwright’s Corner, at the junction with Adderley street, to the inner-city residential market in a R120-million project.

The plan is to convert the 18 floors of office space in Cartwright’s Corner into 108 one- and two-bedroom apartments and eight penthouses.

Cartwright’s Corner, as with some other high-rise buildings, has not been in strong demand as an office address and conversion into apartments makes sound investment sense.

Old Mutual, in conjunction with other landowners in the area, is also looking at ‘pedestrianising’ Parliament street and creating a district. "Having secured a high level of domestic investment, the foreign market, having seen sustained domestic confidence over the past three years in particular, is beginning to take notice of Cape Town," says CTP chairperson Shaun Johnson.

An entire city block in Cape Town has been bought by a consortium led by top Irish property group Howard Holdings for a R350-milllion development project that will be the largest private-sector inner-city renewal project in Cape Town’s history.

Plans are to include a six-star hotel, residential apartments, international retail shops and some premium commercial space. The Irish have also bought 60 of the 84 units at Harbouredge, a R148-million apartment complex being developed by Johannesburg develop-ment and investment company Edge Properties just outside the V&A Waterfront.

Fraser says Johannesburg is starting to see some meaningful foreign investment in the city, but not yet at the level that Cape Town is enjoying.

"I would think that Cape Town, with its Eurocentricity, is easier to understand for overseas investors than Joburg, which will always be an Afrocentric city," he says.

Johannesburg will never be a physically attractive city in the way Cape Town is because it has no natural beauty – but there are plans to create more green space which is not an easy process in an already densely developed area.

Johannesburg has a strong attraction, however, due to its business vitality, which makes it the most important business node in the country. Johannesburg’s urban renewal has emerged strongly in a large number of focused areas or precincts. "We have jewellery, legal, retail, cultural, fashion, constitution, government, media, corporate, mining and health precincts, for example, each of which attracts specific types of investors.

Fraser gives some examples of these developments in the northern central area of the inner city. "Constitution Hill will comprise much more than the prisons and the new court when this massive project is completed, probably in 2007," he says.

It is anticipated to draw 130 000 visitors in 2004, producing an R11-million spend, increasing to 200 000 visitors in 2006 generating a R14-million spend.

The project has both a public and a private sector component with a combined value of more than R1-billion and its vision is "to create a major national and international heritage site anchored by the new Constitutional Court".

The medical precinct lies immediately to the south of Constitution Hill and involves a public sector investment of about R28-million excluding the relocation of the State mortuary from its previous site on Constitution Hill, a further R8,5-million. The precinct is being developed into a medical research area focusing on STDs, HIV/Aids and TB, but also providing family planning and support services for children, primary care services, legal and social services. The entire area of Braamfontein is being upgraded through a number of private and public-sector initiatives.

Its economic anchors are a number of corporate headquarters (Sappi, Liberty Life, the JD Group and SA Breweries) as well as Wits University, the Metropolitan Centre and the Nelson Mandela Theatre (previously the Civic Theatre). "The connections between the area and Constitution Hill are being closely examined and will be improved, as will the civic space around Metro Centre," says Fraser.

Because of the larger number of people working within each node, they also attract more residential numbers.

"For many years, maybe as much as 25, there was no growth in inner-city residential numbers; if anything, a slight decline," says Fraser.

"Over the past five years this has been reversed, with a number of new projects coming on stream. "In Braamfontein one developer is planning new student accommodation for 5 000 – the city’s new university campus, but I think accommodation for 10 000 will be needed over the next five to seven years," he says.

Up until three to five years ago, the city attracted lower to lower-middle income residents. However, the last five years have again seen a change, with the emergence of a far stronger middle-income group and now the first upper-income projects are being undertaken. It has been recognised that local government on its own cannot be responsible for creating a climate for investment, but that the private sector has a major part to play and that, ideally, there should be a working partnership between these two sectors.

In each city, public and private sectors are heavily committed to the processes – in many cases each sector works on specific aspects, in others very much as a partnership. "For instance, safety and cleanliness are high priority in Joburg’s City Improvement District areas, but, since 2000, the Metro Police has been established by council and has largely been responsible for the CCTV programme, although here too business has played a large part," says Fraser.

Karol says he hopes that towards the end of the year the new tax incentives proposed by Trevor Manuel to stimulate investment in urban infrastructure will become a reality.

Fraser believes the incentives are significant in that they reflect the beginnings of a changed attitude from central government.

"As they are, I believe that they are still somewhat flawed, but careful monitoring will hopefully help to prove to government how they can be improved. I don’t believe that on their own the incentives are going to attract a whole new wave of investment nor that on their own they will stop urban decay. They are an added tool in the fight against urban decay, but a potentially important one," he says.

Last modified on Friday, 16 May 2014 11:38

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