The Johannesburg central business district is showing a strong revival, with several companies and professionals moving back there from the suburbs.

The Johannesburg city centre could see seven new rejuvenation projects should Urban Genesis’s negotiations be successful.

Such projects felt the backlash of the 2008 meltdown as both government and the private sectors tightened their belts but efforts are now back to refurbish the Johannesburg city centre in the form of City Improvement Districts (CIDs). The approach is a holistic one whereby the private and public sectors come together in joint ventures to rejuvenate demarcated areas in the central business district.

CEO of Urban Genesis, Shrivaar Singh, says recent developments have seen retailers like Ackermans and other chain stores returning to the city. What is key is management and the strict enforcement of formal services like cleaning and maintenance, security, marketing and promotions. This is in addition to services provided by the local authority.

A tour of the Main Street Mall and the Newtown Improvement District has revealed a stark contrast between nodes being formally managed and those where only basic services are provided. What is also taking shape is the mixed use development, incorporating hawkers and retail by day while residents occupy space in former office high rises converted into residential units. Singh says around 8 000 families have made the inner city their home over the past five or so years. The revamping of the mall area cost around R100m, and included the costly process of redoing the roads in the vicinity.

This relocation brought with it the need for recreational facilities, prompting the renovation and greening of the former derelict and crime ridden Bokkie Park. After a year-long effort involving the Johannesburg city council and the private sector, notably mining entities, the square has been renamed Oppenheimer Park and comprises luscious gardens, a mini auditorium for performers, cement benches in strategic places, often in the shade and more importantly, an extremely popular basketball court. It is a perfect lunchtime retreat for city workers, but also for children, or anyone else really to enjoy the tranquillity of a safe and clean environment. Unobtrusive security guards watch over the park 24 hours a day even when it is locked between 6pm and 6am daily.

Adjacent to the park, informal traders have been allocated space where they can ply their wares under newly-erected shelters, and it all seems to work. So-called “block leaders” have been allocated portions which they manage, ensuring a clean and safe flea market experience. The difference between the formally managed areas, run by the CIDs and the local authority as opposed to the unregulated trade in parts of Jeppe, Bree and other streets is astounding. The latter are filthy, unhygienic and generally unsafe.

The CIDS have been around for about 12 years and if developments in parts of the CBD are anything to go by, they could be a viable option for landlords to protect and enhance their investments. The Urban Genesis website says “… managed environments … are a proven tool in the fight against urban deterioration and decay,” which help to offer landowners a better return on their investment.

 

Recently conducted research by Auction Alliance, the country's leading property auctioneers, shows that the student accommodation market is one of the few property sectors that has successfully bucked the economic downturn.

“Within recent years, South Africa’s student accommodation market has emerged as a key asset class, and has attracted a growing interest from investors, developers and private operators on auction floors countrywide”, says Auction Alliance CEO Real Levitt. 

Factors such as the swift development of South Africa’s middle class, rapid urbanisation and the influx of approximately 72000 foreign students, mainly from Africa, has resulted in a growing inability of tertiary institutions to house students. Recent figures from the education department show that the current provision of student housing in residences is approximately 100 000 for a student population of 530 000.  Meaning that on average, just under 20% of students nationally, will be able to find accommodation on campus.

“Whilst student numbers have significantly climbed in recent years, the lack of funding of tertiary institutions has created lucrative opportunities for a small number of niche developers and private property companies to take advantage of, and seize the opportunity of the high demand and low supply student accommodation market”. 

Over the last few years, the sector has experienced impressive rental growth and attracted a healthy amount of investment when many other categories of real estate investment and development have struggled. With the living conditions of students playing a significant role in their overall performance, a higher end product has entered the market, offering low cost student housing options such as dormitory style shared accommodation rooms or flats within renovated purpose built blocks that offer modern amenities. 

“Companies such as South Point Properties bought partially let office properties that were considered undesirable to mainstream investors due to factors such as insufficient parking, at good prices, and turned them into clean and secure student environments”.

Levitt maintains that this trend has had a particularly significant impact on areas such as Braamfontein in the Johannesburg CBD due to the high concentration of tertiary facilities in the area. “The rising demand amongst students for secure accommodation, within close proximity to such facilities, had an instrumental influence on the area’s rejuvenation”. 

“In spite of the instability of the real estate sector, the lack of student accommodation facilities within close proximity to South African universities, are proving to be significant commercial drivers for investors and developer. The sector is thus anticipated to continue offering investment potential in both the purpose built and buy-to-let sectors, specifically in the current low interest rate environment”. 

Auction Alliance have sold a number of properties to South Point Properties, including New Market Junction in Woodstock for R49 million , 10 & 12 Plein Street in the Cape Town CBD for R30 million, President House in Barrack Street for  R12.6 million and Stanhope Building in Claremont for R24.5 million

This year, Auction Alliance has also sold a student college in Braamfontein for R5.8 million, 46 Biccard Street in the Johannesburg CBD for R15 million and 249 Smit Street Braamfontein for R6 million.