Mashaba Appeals To Private Construction Sector To Partner With The City Of Johannesburg To Rebuild The City

Mashaba Appeals To Private Construction Sector To Partner With The City Of Johannesburg To Rebuild The City

Caption: Executive Mayor the City of Johannesburg, Cllr Herman Mashaba
Image: constructionshows.com

In his keynote address at the African Construction and Totally Concrete Expo 2019 held in Midrand in June– Gallagher Convention Centre in Midrand, Executive Mayor the City of Johannesburg, Cllr Herman Mashaba, called on the private construction sector to partner with the City of Johannesburg in ambitious R20 billion project to rebuild and rejuvenate the inner city.

Focusing on the central Johannesburg areas of Yeoville, Berea, Vrededorp, Fairview, Salisbury, Marshalltown, Wolhuter, Turffontein and City and Suburban, work on the above developments will begin in six to eight months.

All in all, the properties awarded as part of 24 tenders hold an investment value of approximately R20 Billion”

Johannesburg has certainly seen better days,” said Mashaba, “but, as the government of the day, we are determined to return this historic city back to its glory days of free enterprise as well as personal and collective success.

Unfortunately, this all-important expo takes place against a backdrop of massive jobs losses, particularly in the construction sector.”

Last month, Stats SA released jobs figures which showed that, in the first quarter of 2019, South Africa experienced an increase in the rate of unemployment arising out of a loss of 237 000 jobs.

The construction sector, for years one of the beacons of hope for our economy, was the biggest contributor, with 142 000 jobs lost in that short period.

Immediate as well as long-term and sustainable solutions are sought, which is why this expo could not have come at a more opportune moment.

How do we get South Africa working again?”

Presently almost 10 million people are without work.

It is absolutely unacceptable that, in a country like ours, with such a massive infrastructure backlog, we can afford to lose 142 000 jobs in the construction sector and do nothing meaningful about it.

Without critical infrastructure like roads, bridges, railway lines, water pipeline networks and electricity reticulation infrastructure, how do we hope to modernize South Africa’s economy and rescue the construction sector?

Above all, we have a massive demand for thousands of low-cost houses, rental units and student accommodation that could get your sector back on its feet.

Certainly, in the City of Jo’burg, we have room for the construction sector to play a meaningful role in this regard. When we took office almost 3 years ago, we discovered a shocking infrastructure backlog exceeding R170 billion.

A staggering housing backlog of over 300 000 units has led to a legacy of land desperation, backyard dwellings, and shack farming.

Far more housing is needed for those belonging to the missing middle and those in need of student accommodation.

Electricity outages produced from a R60 billion backlog in our electricity network produced over 170 000 power outages each year.

We had to contend with water stoppages resulting from a water network backlog of R18 billion which sprung over 45 000 leaks, losing 107 billion litres of this precious resource, each year.

That is why the City of Jo’burg has embarked on an ambitious Inner City Rejuvenation Programme, which seeks to turn Johannesburg into a construction site.

And this is why we recently awarded tenders for 24 developments, spanning 81 properties and pieces of land. Throughout their lifespan, these 24 developments are expected to create 11 000 direct jobs.

It must be noted that the developments will deliver mixed typologies consisting of one bedrooms and two bedroom units.

The tenders in question are intended to result in mixed use development with emphasis on affordable residential units, student accommodation and retail spaces for small businesses.

The City of Johannesburg is yet to come across a development of this size.

There is simply nothing comparable to it, especially if one takes into consideration similar projects that have been attempted in partnership with the private sector.

This is also shaping up to become the biggest volume of property that has been awarded for development, at one go, in the history of the City.  

This project also lends itself to becoming the biggest mixed use development with a special focus on affordable residential units and student accommodation.

But this project is also important for one other reason; it will play a massive role in our efforts to bolster Johannesburg’s economy.

In September 2017, the City Council approved the Inner City Plan, which is a long-term development program that seeks to address spatial, social, and economic inclusion in our City – a project that will see more and more residents living, working, and enjoying life in the city.

In order to realize a minimum 5% economic growth within the City by 2021, we are ensuring that the Inner City boasts an enabling environment for small businesses to flourish and create permanent jobs.

In return, we intend to attract investment of between R16 Billion and R20 Billion annually into rebuilding our Inner City and converting it into a construction site.

But we know that without the private sector and external investment, we cannot succeed.

We operate off the clear understanding that our relationship with business requires government to pave the way for the private sector to unleash its potential and its balance sheet in our City, where profits can be made and jobs created.

We are eagerly awaiting the submission of tenders for a second batch of a further 70 properties that Council recently approved for offer to the private sector.

More will follow as we have already identified about 500 properties throughout the Inner City, and beyond, which have either been abandoned or hijacked. Thousands more jobs will be created during and after construction and tons of building material will be required to do the work.

We therefore call on the construction sector to partner with the City of Jo’burg to get this sector up and running again, and employing more people. And while we intend using the Inner City Rejuvenation Programme to bolster the economy of the City of Johannesburg, we also intend to make it inclusive.

As the City of Johannesburg, we are determined to build an inclusive economy and as such, genuinely Broad Based Black Economic Empowerment (BBBEE) will be our only yardstick in determining how we achieve this goal, particularly in relation to this project.

Therefore, we will give preference to companies with the best triple-BEE credentials.

This is an ambitious and historic project that we are undertaking and, as such, we want companies that will succeed based on know-how, and not know-who.

While on the subject of transformation, we also need to radically transform our skills base as a country.

Particular attention needs to be paid to our shrinking base of artisans. That is why we have taken it upon ourselves to train 100 young people as artisans, as a pilot project.

We may be a long way off but we intend to do everything in our power, including using as many of our projects as possible, to take as many people as possible off the City’s unemployment line, especially the youth who account for 40% of the City’s unemployed.

For this, we need a strong partnership with the private sector.

A multi-disciplinary fast-track committee is making inroads into producing an environment which is easier to do business in Johannesburg.

Times for approving building plans, rezoning applications, applying for service connections and the like are beginning to drop to record lows.

It is all about changing red-tape into red-carpet for our business community.

And part of making all of this a reality is to put in place City employees who are capable of discharging their duties efficiently and effectively.

I wish to say that the ongoing success of our Inner City Rejuvenation Programme continues to be a source of great pride for myself, officials of the City of Johannesburg and our government.

Although the project is still very much in its infancy, the overwhelming interest shown by investors and property players, indicates that we are onto something transformational.

Slowly but surely, we are restoring confidence in the Inner City as well as other important nodes and building it where none existed before.

Slowly but surely, we are fulfilling our promise of turning Johannesburg into a construction site that will create thousands of much-needed jobs.

As always, I invite you to partner with us, not only to extract value from these initiatives, but to put value back into the City.

What is most exciting about our Inner City Rejuvenation Programme is the ripple effect it will have on the construction sector, which has seen some of the biggest and reputable companies going under and losing jobs.

I often wonder how many jobs this sector could create if every major city around the country used Johannesburg’s blueprint for getting South Africans working again.

We may never know the answer to this question but I can assure you that, as far as the City of Jo’burg is concerned, we will do all that we can, through this project, to provide an economic stimulus to the construction sector.

Divercity invests R2 billion in Joburg inner-city developments

Divercity invests R2 billion in Joburg inner-city developments

ABSA Towers Main and Jewel City to be redeveloped and linked to Maboneng

ABSA Towers Main

Divercity Urban Property Fund is investing R2bn in Johannesburg as part of its strategy to create thriving mixed-use inner-city precincts. This investment, the largest in the Johannesburg CBD for some years, is focused on the redevelopment of the iconic ABSA Towers Main building and Jewel City.

Newly launched Divercity is an investment fund backed by the experience of some of South Africa’s leading property investors and developers. It is set to renew and re-energise the country’s urban centres with its unique focus on inner-city precinct development that combines commercial buildings with affordable residential space to create inclusive and diverse neighbourhoods. Its strong business case is also transformative in a uniquely South African sense.

Divercity’s major shareholders and stakeholders are Atterbury and Ithemba Property, with Talis Property Fund playing a major part in the formation of the fund. Cornerstone investors will be RMH Property and Nedbank Property Partners, subject to Competition Commission approval. It launched earlier this year with a R2bn portfolio of prominent commercial and affordable residential assets, which will grow to over R4bn on completion of its latest development projects.

Divercity Urban Property Fund

Wouter de Vos, CEO of Atterbury Property Fund, says: “Divercity is leading the way in creating inclusive, sustainable, amenity-rich neighbourhoods and inspiring others to commit to the vision of regenerated cities. The ABSA Towers Main and Jewel City projects are iconic and symbolic of where Divercity is going.”

Following a competitive bidding process, Divercity acquired the 30-storey ABSA Towers Main building from ABSA, conditional on approvals from the Competition Commission.

The currently unoccupied building will be redeveloped into a one-of-a-kind mixed-use building for South Africa, including 520 affordably priced residential rental apartments, a floor of coffee shops, restaurants and recreation, ground floor convenience retail, child care facilities, a public park, integrated public transport facilities and a wealth of public art.

ABSA will also be leasing back nine floors with 10,000sqm of office space in the redeveloped building. Once completed, the development will be valued at over R400m.

We are constantly looking for ways to express who the new Absa is and what we stand for. We are taking an old building and giving it a new lease on life to benefit our colleagues and the broader community. It’s about finding new ways of getting things done by creating a vibrant space where we can live, work and play together,” says Wendy Cuthbert, head of Absa Corporate Real Estate Solutions (CRES).

Jewel City new Urban Plaza

Rian Reyneke, CEO of Ithemba, says: “With its partners, Divercity has an established track record of successful commercial development and good placemaking. Like Divercity, ABSA is deeply committed to the Joburg inner city. This commitment and urban regeneration are the shared focus behind the project. Our likeminded partnership has made it possible to redevelop a building as significant as ABSA Towers Main.”

The project will commence in early 2019, with ABSA expected to reoccupy the towers early in 2020. The 20 floors dedicated to residential accommodation and recreation will be launched in various phases.

Besides creating an inclusive new world-class ‘live, work, play’ environment, the project is also designed to enhance the area as a whole. As part of a wider neighbourhood development initiative, a pedestrian-friendly walkway with street furniture, lighting and art will be created from ABSA Towers Main all the way to Maboneng. This unique urban intervention prioritizes pedestrians and people of the local community above vehicular traffic.

Between ABSA Tower Main and Maboneng is Jewel City, the former heart of the diamond and precious metals trade in Johannesburg, which spans six city blocks that have been closed off to the public for decades. Divercity acquired Jewel City from Redefine Properties and the property transferred on 1 October 2018.

Jewel City will reopen to the public as a vibrant mixed-use precinct with a fully pedestrianized streetscape and a total development value of over R1.2bn once fully completed. The project includes the redevelopment of existing buildings as well as the construction of over 40,000sqm of new buildings in the precinct.

The rejuvenated Jewel City will include an abundance of amenities such as a school, clinic, gym, parking and convenience retail as well as fast food and restaurants. It will also include 20,000sqm of commercial space, 1,200 new residential apartments in phase one and up to 1,000 in phase two. The pedestrian-friendly walkway between Absa Tower Main and Maboneng will past directly through it.

Work on the Jewel City project begins in November with the first phase of retail, commercial and residential space set to be ready by August 2019.

In the next 18 months alone, with its ABSA Towers Main and Jewel City projects as well as R400m of residential accommodation under development in Maboneng, Divercity will launch more than 75,000sqm of new residential space in Joburg – more than 2,500 apartments in total.

Tebogo Mogashoa, Chairman of Talis Property Fund, as well as Chairman of the Atterbury Property Fund explains: “Creating affordable rental accommodation in a mixed-use precinct in a central city location gives wage-earning employees the opportunity to live close to work, which is extremely rare by global standards, and especially so in South Africa. Besides the luxury of offering a short walk to work, the pedestrianised precinct is also integrated with public transport for those who travel further.”

Connected mixed-use developments are widely recognised as creating more economically successful and socially desirable urban environments. But besides being good for Johannesburg, its people, its business and economy, Divercity’s game-changing developments are also good for the environment.

Denser urban living close to work opportunities is prized as an essential strategy for limiting carbon emissions. The two redevelopment projects also represent the adaptive reuse of existing but outdated structures, thereby being sustainable by reducing the need for new building construction, which is a massive contributor to carbon emissions. The new ABSA premises is designed to be Green Star SA rated by the Green Building Council of South Africa (GBCSA). In addition, the residential component of the building will also use sustainable materials where possible and employ sustainability enhancing interventions that limit energy and water use, and costs, for residents.