By Ian Fife & Xolile Bhengu

Sprawling new minicity signals development spurt - and environmental concerns  
 
The biggest property development in SA history, an investment of at least R11bn, has begun on the northern fringes of the Johannesburg metro.

It signals what looks to be the start of a golden era for large property development in Gauteng and other urban centres, and reflects growing confidence in the long-term prospects for property investment.

Not only will these projects change the face of our cities but, in time, they will lead to the creation of new urban and peri-urban conglomerations.

"We can expect a decade or more of massive property construction, greater than I've seen in my 45-year career," says Mvelaphanda Properties director Geoff Chait.

"Our property industry was dislocated from the world property market during the apartheid years and development has lagged behind for 35 years. Now it is beginning to catch up as we reconnect with the world."

The new development, to be called Waterfall City, will close the gap between Midrand, Woodmead, Sunninghill and Buccleuch.

At 2 200 ha, it is roughly the size of the northern Johannesburg suburb of Bryanston - larger than either Durban North or Constantia in Cape Town.

It will contain: Up to 20 000 apartments, a 5 500-unit affordable-housing development - Gauteng's biggest - and an 860-unit middle-income estate; A golf estate with 2 600 homes and private 18-hole course; A second, public golf course; A retirement village; Office space equivalent to about two-thirds of the Sandton CBD and equal to half the industrial space of Midrand; At least 150 000 m² of retail shopping, forming a proposed new central business district that could become Midrand's retail centre ; A 120-unit equestrian estate; A hotel, health clinic and schools; A service yard for Gautrain; and Africa's largest cemetery, with 500 000 grave sites. Apart from its size, the outstanding feature of Waterfall City is its unique blend of stern religious conformity with commercial exploitation, which will channel all of the owner's profits to the education of underprivileged children.

The structure of the deal also presents two key challenges to conventional property development in SA: it overshadows the bite-size, short-term, catch-as-catch-can projects that have typified developers' schemes since the volatile, risky apartheid years of the 1980s and 1990s, and strongly endorses large-scale leasehold over freehold ownership.

But Waterfall City also elicits strong condemnation from conservationists and social development critics. The conservationists fear the development - particularly the golf courses - will seriously deplete the region's water resources and pollute the Jukskei River and other water courses that flow through the project. The area is home to several endangered plant species which could be wiped out by environmentally insensitive construction, says Bob Dehning, committee member of the Gauteng Conservancy Association and National Association of Conservancies of SA. "Developers country wide are using golf courses as an eco excuse'.

They totally and irrecoverably destroy all the natural flora and drive out birds, small mammals and invertebrates, creating an environmentally sterile and useless artificial area," he says. Wits University architecture professor Alan Lipman questions the developers' claim of social responsibility. "The architecture guidelines and everything are almost too thorough and comprehensive. It looks as though it is a development for the wealthy, designed to keep people out."

He questions the overall relevance of the development: "This is huge. Do we need such a development in a country with a desperate housing shortage? Do we need more high-rise office parks, more high-density residential homes, next door to already choked houses? "Equestrian estates, polo fields and golf estates are for the filthy rich. This development speaks money, money, money - with a few token, supposedly low-cost houses. " Despite such concerns, however, the project already has official approval.

Absa economist Chris Hart says the R400bn government is about to begin spending on infrastructure such as roads, dams and the Gautrain rapid rail link between Johannesburg CBD, Johannesburg International airport and Tshwane will accelerate the Waterfall City and other property developments in the region. Both he and Wits property professor Francois Viruly agree that it marks the start of a 10-20-year construction phase in the province.

Foreign property investors scouring the world for yield because returns elsewhere are declining are also beginning to flood in. But they must join the queue of more confident local investors to buy investment properties. "The economy is shifting from consumption to investment growth," says Hart. "The long commodity boom will also promote spending on construction and engineering that will grow the economy further."

In the short term, SA is short of investment-ready opportunities after the decades of declining development. Viruly says the shortage of skills and capacity will become more acute as the infrastructure programme begins and developers struggle to meet investment and user demand. But, says Hart, this will be overcome as incomes rise and students flock to learn the related professions.

"It is one of the reasons the expansion will take time," he adds. "Even the inability of municipalities to approve enough zoned land will improve as we move from transformation to growth," predicts Chait. Zenprop director Rodney Weinstein was one of the first to acquire leasehold in Waterfall City, being built on one of the last few large expanses of farmland within an SA city precinct. "The listed property funds with their ultra-low yields are buying up everything in sight," says Weinstein.

"So we must start creating our own properties." Zenprop's new office building can already be seen rising up alongside the N1 highway to Pretoria. Waterfall City is located on property owned by Witwatersrand Estates Ltd, which was formed in 1934. The company was used as wealthy trader Moosa Ismail Mia's vehicle to buy the 3 000 ha farm, Waterval, in the same year, because the Asiatics Tenure Act prevented him from owning property in his personal capacity. He bought it as a charity on which to educate underprivileged children.

All the proceeds from the development will go to the charity, the Waterfall Islamic Institute (at least R200m/year for the next five years and R20bn or more in current rand value over the next 90 years), run by the Mia family. With more than 700 000 m² allocated to offices and a further 160 000 m² to industrial sites, Waterfall City could become a large commercial growth point. Developers say there will be no problem with demand as the economy grows and millions of South Africans migrate from the country to the cities and move up the income ladder.

"Though it is within the urban boundary, Waterfall City is typical of the satellite cities that will grow beyond the existing cities, like Atlantis up the coast from Cape Town," notes Chait.

Some people fear that developments of such large scale will overrun open spaces in and around cities. But Waterfall City's developers aim to allay those fears: the project defies SA developers' habit of getting in and out of projects quickly. Ownership in this development will be based entirely on leasehold instead of freehold - underlining the developers' long-term commitment.

The Mias resisted developing the property because Muslim convention gives it holy status, prohibiting its sale. The family also rebuffed repeated attempts by the apartheid government to divest it of the property and the school - though the government did succeed in expropriating part of the farm for Eskom's headquarters and for the N1 highway that runs through it. Devoutly religious, and wealthy from large mining, retail and other business holdings, the extended Mia family lives on the property, in a street of modest suburban houses dating from the 1940s and 1950s.

Their devotion to Islam has also determined that much of Waterfall City must make a contribution to the community; hence the affordable housing, the cemetery and a public golf course designed by Gary Player.

The development also restricts the sale of alcohol in restaurants and forbids other activities inimical to Islam. For the same reasons, none of the family members interviewed would allow themselves to be photographed for this report. "Sustainable development is also important to our beliefs," says family spokesman Ibrahim Mia. The project owes its existence to the persistence of one man: Werner van Rhyn (43), head of Property Management & Development.

He first approached the Mias six years ago to develop the land - an idea that was rebuffed. But Van Rhyn slowly won their trust and involvement in the planning of Waterfall City. What emerged is a model for the development of large parcels of land owned by non developers such as municipalities, religious and educational institutions and government departments. "Typically, these properties are put out to tender," says Van Rhyn.

"The owners are then faced with proposals that look great on paper but can be aesthetic and environmental disasters when put up. "Our aim was to put the parcels of the property into the hands of the most capable people, who would ensure the maximum sustainable returns for the Islamic Institute over the next 100 years or so. We prepared the foundation for the development with absolute detail in design and specifications for each section of Waterfall City," he says.

Van Rhyn then began negotiating leasehold agreements with a who's who of developers, including Investec, Sanlam, Zenprop and Group Five.

They must put in the entire infrastructure, such as roads, water, sewerage and electricity, to the standards set by Waterfall Estates Ltd before they can begin marketing their properties.

All designs must be approved by a committee of architects and designers appointed by Waterfall Estates. South Africans repulsed by the generic "villa" clusters spreading across the landscape will be delighted to know the developers have placed a blanket ban on pseudo-Tuscan, Balinese, Georgian and French styles.

Building materials are restricted to stone and other natural external finishes, plastered walls, and slate, ceramic tile or iron roofs to create a restrained and timeless built environment.

This is not the first large SA development, nor are its tight limitations on development new to SA. Tongaat subsidiary Moreland set the pace with its Zimbali development in Ballito and Umhlanga Ridge, as did Monex's Martin Wragge with his much-maligned Century City in Cape Town, which has ended up making developer John Rabie hundreds of millions of rand. Zero-tolerance development controls also govern schemes such as the "new-urbanist" idyll of Thesen's Island in Knysna.

But Waterfall City is twice the size of the largest of these projects. Aside from environmental objections, the project has elicited social concerns.

For instance, the gap between rich and poor communities is perpetuated: a gated estate is located near Woodmead and Sunninghill in the south west, while the affordable housing is clustered in the north east.

More critically, development of the Mia land will reduce the largest open space in the city and aggravate congestion of road and services networks.

A further 6 000 ha of open space will disappear when AECI develops its property adjacent to Waterfall City.

Pressures on Gauteng's spaces, resources and services are bound to intensify as the province's population grows at a rate to reach 20m by 2010.

The question remains whether Gauteng local authorities, already buckling under population pressures, will be able to develop the skills and capabilities to balance the needs of development with social and environmental imperatives.