Category Archives: Cape Town

Two Cities Get Terminals

Durban Harbour

Durban Harbour with Mouth Widened

Residents of Cape Towns have been complaining for lack of one for years and Durbanites believe their city deserves one too. We are talking about cruise ship terminals. It’s in the spotlight as South Africa’s two largest coastal cities seem to be pushing for the same thing. The news came recently that there has been approval for both the projects to go ahead with new cruise terminals in mind.

One may ask what the benefits are. The Durban Port Authority sees a dedicated cruise terminal, close to the ports entrance, as a natural extension of the development around the Durban Point Waterfront. The idea being that this is the most sustainable way to interface the operations.

In Cape Town, Future Cape Website, claims that a ground swell of Capetonians have had the cruise terminal as part of a broader vision for Table Bay Harbour by 2040 in mind for some time. The potential of using the E-berth as the dedicated site for the cruise terminal seems an important part of their vision. Regardless, Transnet has finally given the go-ahead for building a dedicated berthing terminal for cruise liners in Table Bay harbour.

This is in the wake of last year’s decision by the Department of Home Affairs to ban cruise-liners exceeding 200m in length berthing at the V&A Waterfront, citing safety concerns. The move got well-to-do travellers a little bent out of shape as they had to condescend to the likes of the Duncan Dock at Table Bay Harbour.

In Durban the planned terminal will be operated on a seasonal basis in line with the cruise liner schedules, but to ensure an on-going stream of income during the off season, the terminal will double as a meeting, conference and exhibition venue.

The recent breakthrough of Vetch’s deal between the Durban Point Waterfront developers and water sports clubs will also see development towards the harbour’s North Pier, which has been closed to the public since the harbour entrance was widened. Planned development of hotels, restaurants, shops and other facilities will mean the public can enjoy views of the harbour’s entrance channel again.

Transnet claims that the development of cruise terminals in Durban and Cape Town came in response to the tremendous growth that the cruise industry had enjoyed in recent years. Cruise tourism was the fastest-growing sector in the global tourism industry, and was set for continued growth.

Queen Mary in Cape Town

Queen Mary in Cape Town

In Cape Town the plan is to complete the terminal within the next two years. Identifying suitable investors and operators is still in process. The development has been widely welcomed. Last year 19 visiting cruise liners brought approximately 11 144 passengers to the Western Cape which sustained a number of jobs in the tourism industry.

Opposition to the plan has often been centred on the competing priorities surrounding basic services, and the need for other areas of infrastructure which would serve broader Cape Town. But it seems that tourism will win this one since new jobs are a certainty in this regard.

No numbers are being bandied about yet by either Transnet or the port authority. However digging back to 2010, the ports authority boss Khomotso Phihlela told a press conference that an integrated cruise terminal in Durban could see an investment of not less than R500 million, and possibly up to R2 billion. This would include leisure and retail components, as well as a new Transnet office block.

Regardless of the costs it seems both Cape Town and Durban will see new terminals built. These will most certainly be another tool to bring in tourism to the two cities, boosting their prestige a little and causing a knock-on effect to commercial property value, certainly in precinct of the cruise terminals.

Cape Town – Making the City Work

Cape Town CBD

Cape Town CBD

Cape Town’s CBD, the business hub of the South Africa’s second biggest city, is working hard on its image as a functioning and healthy city centre where things work and business gets done. Investment, infrastructure upgrades and improved systems all reveal a sober and progressive approach to making Cape Town’s heart functional and competitive.

In the last four years the Cape Town CBD has been the target of nearly R5 billion’s worth of upgrades and development. A recent survey commissioned by the city’s Central Improvement District values CBD property at about R22.3 billion.

Recent or current developments in the city include:

Cape Town Convention Centre

Cape Town Convention Centre

The R690 million expansion of the Cape Town International Convention Centre (CTICC) which is in its planning stage. This redevelopment will see the venue double in size. The completion date is set for July 2015.

The R138m Provincial Government building upgrade in Dorp Street is to be completed in July.

The R1.6bn 32 floor (tallest in the CBD) Portside Building between Bree, Mechau, Hans Strijdom and Buitengracht streets. This is an enterprise by FirstRand Bank and Old Mutual Properties aimed at completion in 2014.  The building will be the provincial headquarters of First National Bank, Rand Merchant Bank and Wesbank.

The R32.8mil Civic Centre refurbishment has begun, the completion date is still uncertain.

The R1.4bn Cape Town Station upgrade, phase one is underway and phase two is still in the planning stage. The date for completion is not certain.

Port Side Building

Port Side Building

Ingenuity Property Investments are redeveloping the Atlantic Centre in Christiaan Barnard Street to the tune of R160m and should be completed early 2013.

The R80m development of Touchstone House on the corner of Bree and Mechau Streets is in its planning phase.

The R150m upgrade to Newspaper House in St George’s Mall is to be completed this year.

The Cape Town City Hall is also due for refurbishment. It is estimated that it will take R20 million to upgrade the historic building. A variety of repairs as well as major upgrades to the roof and auditorium are required if the building is to remain functional. The timeline is likely to be between two to three years.

The Cape Argus refers to a “turnaround strategy” that was put into place for the building back in 2009. Since then R4m had been spent on repair projects. This includes R1m to refurbish toilets and R500 000 to restore woodwork. Portions of the ceiling have been repaired, light fittings replaced and walls painted. But major repairs are still required.

Cape Town City Hall

Cape Town City Hall

By way of justification for all this expense, is the offering of City Hall as a nucleus for the city’s arts community. The intention is to position the venue as a location for various creative activities. Clearly this is already the case. Between January and September, more than 70 events were held at the City Hall. The Cape Argus reports that another 40 are planned up until the end of this year. The city has been meeting with the Cape Town Partnership and the arts sector with the view to working on arrangements to secure events until 2015.

From art to infrastructure. Cape Town’s foreshore dead-ends and unfinished freeway are finally to be looked at with a creative eye. The City of Cape Town, with the help of University of Cape Town (UCT) engineering students, is hoping to find a viable design to complete the structures.

Students from the university’s engineering and built environment faculty will be asked for draft innovative design proposals for the incomplete freeway in a way that will improve access to the city. It has remained incomplete for many years due to lack of funding.

Unfinished Flyovers

Unfinished Flyovers

For some they have been a blot on the landscape for others an icon, regardless the unfinished flyovers are to be examined and considered for more constructive use. Proposals include; creating parking beneath them, a museum and even providing viewing spots of the city.  One main focus is on how to use the structures to help ease access to the city centre, and in this way improve working and living conditions for residents.

The project would start in January and the tenders would go out in early 2014. One possibility mooted is for an international consortium to be responsible for the construction work. This would be a long term project that would change the landscape of the city.

CCTV cameras - CBD

CCTV cameras – CBD

There’ s a great deal of attention being paid to crime and grime issues in the CBD too and people seem to be  enjoying their work environment. The aforementioned survey commissioned by the City’s Central Improvement District (CCID) reveals that 82.6 per cent of people feel safe in the streets and eighty-three per cent of businesses also rated the CBD the safest in the country.

The report found that over the past three years property investment in the central city brought in R4.6 billion and a GDP contribution of R1.5bn was generated from events hosted in the city. According to the survey between 2001 and 2010, the residential population in the city had increased by 76 per cent. A further 79.3 per cent of the people interviewed felt the city was clean and orderly while the remainder said cleaning could be improved.

Just over 85 per cent said they felt safe in the city at night and 90 per cent of businesses were satisfied with the overall services of the CCID. The CCID reported that crime rates fell by half in the central city. In social development, the CCID said they were working with 16 social service providers to help homeless people. Evidently of the CCID’s budget of R37.5m, more than half would be spent on safety and security.

Golden Arrow Busses

Golden Arrow Buses

Finally, improved transport is very much in the vision of the city. Cape Town is moving closer to gaining complete control over Cape Town’s public transport operations. It will see the city managing the subsidies of the Golden Arrow Bus Services, which currently fall under the provincial government. In 2011, Golden Arrow Bus Services received a R600 million subsidy. It has more than 1 000 buses on 900 routes across the metro. Now the city is applying to the national government for the contracting authority functions to be taken over by the city.

At the moment, rail services are managed by the national government while the MyCiTi service is city-run. Eventually these will fall under the Transport Authority. Going forward, the goal is a single payment method for all modes of transport. This can be done with the myconnect card. It will also affect scheduling of services, allowing for a shared timetable. The entire integrated public transport system is expected to be complete in the next five to seven years.

Cape Town seems to be focused, industrious and committed, as people in the CBD make their city work.

Cape Town’s Community Upgrades – bread or cake?

Fairhaven-playground-spray-park Washington

When there are Royal weddings and countries jostle to hold grand sporting events it’s often to distract the people from recessions, wars and scandals. So it’s hard not to be a little cynical about grand gestures by politicians purportedly for the good of the masses. Some would suggest a connection between the ANC youth league’s intention to make Cape Town ungovernable and the latest announcement by the City to spend R132 million on community facilities this municipal financial year.

Perhaps it’s disingenuous of those who may be casting aspersions on the motives of the council and we should all just be grateful that something tangible is in the pipeline for underserviced communities, even if it isn’t infrastructure, housing or education related.

According to Mayoral Committee Member for Community Services, Councillor Tandeka Gqada: “It’s important that residents of all communities have the kind of facilities that ensure an improved and more enjoyable quality of life. We are committed to providing this for the people of the Cape Town municipality and this upgrade plan is just one of the many ways we are doing that” the SA The Good News website reports her saying.

In short the City of Cape Town’s Community Services Directorate is embarking on a series of planned upgrades, with the intention of providing quality recreational and educational services across the City. In total, the upgrades will cost more than R132 million over the next municipal financial year.

The City will be building brand new facilities and upgrading established facilities in order to attain what it says are “world class standards.”

Plans include sports centres and swimming pools, halls, libraries and parks. One of the main buzz phrases to come out of the announcement is ‘spray parks’.  A spray park is a water feature which sprays water so users can play in it. Essentially, it is sprinklers installed intermittently in a grassy area.

Gqada has explained that the spray park concept is being applied worldwide with great success. She has pointed out that as a spray park has no standing water, it “eliminates the need for lifeguards or other supervision as there is practically no risk of drowning”.

Spray parks are intended to service communities where there is no municipal swimming pool, school pools or pools in private houses. The City has mapped every single swimming pool in the metro to ensure that new pools and spray parks are built in the most ‘appropriate’ areas of the city.

Areas in which community upgrades and new developments are planned include Khayelitsha, Gugulethu, Imizamo Yethu, Du Noon, Nyanga and Athlone. The City’s position is that identification of these areas form part of the City’s long term redress plan to eradicate the historical legacy of Apartheid.

Athlone is an example area for Community Service upgrades and development. The City of Cape Town’s Community Service Directorate has added Vygieskraal Stadium, the Manenberg municipal pool and the Athlone municipal pool to their list of facilities to be revamped.  A total of R3.2 million of the project’s funds will be spent in Athlone. The project is set to be complete by June 2013.

Tandeka Gqada said via a press release that two primary methods are used to identify and prioritise under-served communities. “Firstly, community research is used to determine from communities what their needs and preferences relating to community facilities are,” she said.  “Secondly, the Council for Scientific and Industrial Research (CSIR) was commissioned by the City to analyse current community facility provision and distribution, and model future needs spatially, for the whole metropolitan municipal area.”

Kewtown and Heideveld will be receiving a full-size artificial soccer field in the next municipal financial year to the tune of around R5 million each based on the above facility planning methodology.

People’s Post spoke to Kewtown resident and high school teacher, Ian McLean, who believes not upgrading any educational services in Athlone “is an indictment on the City itself”. However, he is thrilled that the Athlone pool will be upgraded. “An upgrade for that pool is long overdue,” says McLean. “We were promised it would be fixed up before the 2010 World Cup but nothing happened. I’m glad that something will finally be done about it now,” he says.

Ian McLean at least has a positive attitude despite concerns about unattended areas of need. One can only hope others do to, especially since these upgrades and developments can only have a positive spin-off for the communities involved. However when communities are in turmoil about basic service delivery spray parks and the like may seem like offering “Qu’ils mangent de la brioche” that is: “let them eat cake.”

Western Cape Tourism on the Offensive

According to the Western Cape only brings in 13% of South Africa’s domestic tourism revenue or R2,8 billion. That compared to KwaZulu-Natal with 26% of revenue or R5,7billion. But tourism in general grew by 5% in the Western Cape in 2011 contributing 10 per cent to the province’s gross domestic product (GDP) creating 70 000 jobs over five years.

The Western Cape Tourism department is mindful of the need to “encourage our locals to travel more within our cities. We need to reinvent our tourism sector and rethink the way we are doing things” Tourism MEC Alan Winde is reported to have said recently.

Mossel Bay and Plettenberg Bay are among coastal areas under pressure to refurbish, renovate and develop. Western Cape government’s Tourism department has announced a seafront development plan incorporating and connecting Kalk Bay, Muizenberg and Gordon’s Bay among others.

Previously disadvantaged communities seem to be targeted to become involved both as tourists and as proponents of tourism in their greater areas. Areas intended to benefit from upgrades to their tourism and entertainment infrastructure include Masiphumelele,  Ocean View and Mitchells Plain.

Fish Hoek will be paired with Masiphumelele and  Ocean View residents with the intention of making it a friendlier tourist destination. Formal stalls for craft work and displaying art in general will adorn the beach front.

Kalk Bay’s Main Road is to be revamped connecting communities previously effected by the Group Areas act. Muizenberg’s old retail and culinary district is to be refurbished and developed too.

Recently Tourism MEC Alan Winde referred to projects in Lambert’s Bay and Cape Agulhas as model examples of where communities previously excluded from decision making  were given the opportunity to become part of the process in the upgrading of their surroundings. An area like Monwabisi is to be similarly the target of investment.

“We need to encourage our locals to travel more within our cities. We need to reinvent our tourism sector and rethink the way we are doing things,” Winde said to the Cape Times.

The knock-on effect to properties in these areas is expected to be very positive. As upgrades take place for infrastructure and retail spaces, commercial nodes will increase in demand. Subsequently residential properties will find themselves on the up and up as areas improve and demand increases.

Meanwhile at the other extreme of the province next to the Eastern Cape Border, Plettenberg Bay’s ten-year-old plans to build a small boat harbour may be coming to fruition with an invitation to residents and interested parties to take part in an environmental impact assessment.

In March, Bitou council put pressure on Western Cape Marina Investments to take the small boat harbour project forward or lose the contract. WCM which won the tender in 2002, has finally  released  a document detailing designs to build the harbour in the Piesang River mouth, besides the Beacon Isle Hotel.

The development includes construction of residential blocks on either side of the river with a commercial zone to replace the derelict edifice which accommodates the Moby Dick restaurant and its adjacent buildings. The intention would be to transform Plettenberg Bay’s Central Beach area into a modern waterfront with a broad tourist friendly appeal.

The Central Beach is to be developed, becoming the site of a number of residential and commercial properties some of them multi-storey buildings which will completely change the look and feel of the beachfront . Dredging of the shallow Piesang estuary  will be mandatory  if it is to be deep enough to accommodate boats and moorings, and the harbour is to be flanked by buildings up to seven stories high in some cases on the northern and southern banks of the river mouth. The proposed small boat harbour  should also assist the operators of Plettenberg Bay’s whale and dolphin watching as well as charter fishing operations.

The overall expectation is that the whole enterprise will be the much needed shot in the arm to the struggling local economy with regard to construction contracts as well as job and tourism opportunities. The overall value to the local property market  is easy to underestimate given the long term nature of the developments.  Though tourism may suffer in the short term those who get into the market early will benefit as the dust settles and beach front occupancy climbs.

Looking at another example of development of Western Cape beachfronts we turn to Mossel Bay. A few important developments  in their area are likely to draw substantial capital as well as many people to Mossel Bay. Firstly Petro SA’s offshore latest drilling operations have received the go-ahead and work has  started.

Another project is the refurbishment of The Point precinct. This is the pivot of Mossel Bay’s tourism industry. The Point is about to be confirmed as a Provincial Heritage Site. The intention is to see it become a World Heritage Site within the next five years. In the refurbishment plan a public square is in the offing  as well as little carriageways and a museum.

A further development is to follow the successful model of the Victoria and Alfred Waterfront in Cape Town by creating a much anticipated waterfront. The Mossel Bay Harbour, the smallest of fully functioning harbours in South Africa is to be transformed into a tourism focused node with retail development a top priority.

Local government seems very much on-board . Minister Alan Wilde spoke to a local estate agency assuring them that growth in the Mossel Bay was a priority. An estate agent at the meeting said: “His message was that people needed to bring tourism and business together to move forward and reach for new goals.”

Some astute investors are already buying up property suitable for renting here, in the knowledge that demand for such properties will increase. With Petro SA’s new projects will come new staff needing rental accommodation.  This is expected to grow at 7% a year. The influx of professionals for this and the developments at the waterfront and harbour are expected by one estate agency to be a market that will grow by 4% a year, renting or buying. Also a 5% increase is expected for the conventional property market, including retirees and locals.

It’s clear that the Western Cape Provincial government is following the state’s lead in investing in local infrastructure. The CBD of Cape Town had a boost in infrastructure development in time for the 2010 world cup, now it’s the rest of the province’s turn.

Confidence in a Province that has Confidence in itself

A Cape Peninsula estate agency MD Lanice Steward of Anne Porter Knight Frank is quoted as saying recently that “there is a growing confidence that the Western Cape will be efficiently run, that it will not only spend the money allocated to its various departments but will do so with wisdom and insight into the needs of the communities it serves.”  Does the Western Cape deserve the positivity expressed by Steward?

Without concerning ourselves with party politics or getting caught up in comparisons a perusal of some of the vital signs of the province do indicate health. It may be that there is a proactive air about the Western Cape. Getting beyond some of the more obvious signs like the provinces’ record of intent with regard to fighting crime and corruption, there is, it seems, to be a genuine striving toward service delivery. But there are other tell-tale indicators of a culture of intent.

Investment indicates a positivity and confidence within one’s own market.  The Western Cape Investment and Trade Promotion Agency reports cautious optimism for investment projections for 2012. “The growth in global projects over the past five years was an indicator of appetite for investment and was likely to have a positive impact on Western Cape foreign direct investment (FDI) projects going forward”, said Wesgro IQ head Jacyntha Maclennan. The Western Cape’s FDI into Africa grew by 73.3% year-on-year, with the province accounting for the lion’s share (74%) of South African investments into Africa, revealing a distinctly outward focus.

Wesgro’s CEO Nils Flaatten says that The Western Cape’s strong investment into Africa was largely due to property development projects and financial services.

In addition to this Cape Town was found to be most popular city in South Africa for FDI between 2007 and 2011. The Western Cape was noted as the second most popular provincial FDI destination. The Western Cape took two of the leading 15 FDIs into South Africa in 2011. They were both capital investments going for more than R350-million in the field of communications.

Engineering News reports that the top three sectors in the Western Cape for FDI from 2007 to 2011 were software and IT services, with 17% of all; business services, holding 12% of projects; and communications, capturing 9.4%; renewable energy attracted only 2% of projects.

So much for FDI, is the Western Cape investing in itself? As it turns out Helen Zille announced directly after the President’s state of the nation speech, what she calls “game-changing” infrastructure plans.

“The most powerful economic lever in the hands of a provincial government is the ability to build growth-creating infrastructure,” Zille told the opening of the provincial legislature in Cape Town.

Four regeneration projects have been announced: the Founders’ Garden/Artscape precinct, the development of a government precinct and the further development of the Somerset Hospital precinct. The Cape Town International Convention Centre is to be doubled in capacity.

Zille said the province would launch a road network improvement project to support the Saldanha Industrial Development Zone initiative.

She also announced plans for a project to provide broadband internet access to every citizen, school and government facility in the province. The goal was to connect 70% of government facilities and every school by 2014. Within the next two years, Khayelitsha, Mitchell’s Plain and Saldanha Bay would ideally all be connected, Zille said.

Rightly stated, Zille points out that no government can achieve economic development on its own, hence the creation of the Economic Development Partnership (EDP). The intention is for all stakeholders in the economy to meet and work on a shared agenda for development and economic growth. The steering committee would consist of members from business and government.

Viewing from the property side is the Western Cape Property Development Forum which was established to interact with the City “to address existing processes, practices and policies to ensure that systems are streamlined and effectively integrated to deal with issues that might impede development “they announced.

Having been formally established in 2008, the WCPDF has been operational since 2007. An example of one of its events was the hosting and facilitating of World Planning Day – with the theme Planning for a Low Carbon City. The event brought together architects, town planners, developers, economists and environmentalists with the view to improving interaction between these vital role players.

The Western Cape has had its fair share of dereliction challenges but Cape Town has led the way in coming to terms with this common urban phenomena. When it became clear that a blanket approach was necessary a Problematic Buildings Unit was created to end the rot.

The unit was formed to focus on and deal with derelict properties, which were contravening regulations, including those relating to fire and health.  This move is a partnership with the city’s Human Settlements Department, the unit has now come up to speed with the city’s most severely affected buildings.

A bylaw was passed last year initially identifying 280 problem buildings. By half way through the year there remained 160 buildings under investigation throughout Cape Town – in the city centre, Mitchells Plain, Durbanville, Salt River and Camps Bay.

Cape Town also has a dedicated Social Housing Police Unit that is focusing specifically on city council rental properties.  Swift action and intent among lawmakers has resulted in this effective multipronged approach.

Although intent has come from Western Cape Government a hand in hand approach with National Government is also required on some projects. It has been announced by Finance Minister Pravin Gordhan that the Clanwilliam Dam wall will be raised in order to provide an additional 10 000 000 cubic meters of water a year for downstream farmers. The dam is situated in the middle reaches of the Olifants River, near the Western Cape town of Clanwilliam.

One project which sums up the attitude of a local government wanting to be, or at least seen to be, user friendly, is the Red Carpet Call Centre. Small businesses in the Western Cape can now call a provincial hotline to lodge and request assistance for their red tape-related issues or for any general information on starting and growing a business.

The Call Centre, which arose out of the Department of Economic Development and Tourism’s Red Tape to Red Carpet Programme, reflects the Western Cape Government’s intention to create and maintain an enabling environment for business.

Time will prove whether the way things appear is how they actually are. But the Western Cape Government keeps appearing in the news for all the all right reasons, at least a good enough measure of the time to warrant a heads-up for property investors who are discerning that it’s more than just the Cape’s natural beauty and bounty that’s cause for the property market to blossom.

Letting Lanice Steward have the final say: “Our upcountry buyers see it (Western Cape) as likely to forge ahead economically and it has to be said that this perception is largely based on the feeling that the administration is more competent than that of other provinces.”

Cape Town Office Vacancies- Today and Tomorrow

Some would say that we build for tomorrow not for today. For some time now Cape Town CBD has seen few new construction projects and given the latest office vacancy, figures that may be just as well.

Looking at the latest SA Property Owners Association (SAPOA) office vacancy survey for 2011 Capet Town’s six out of seven nodes face a trend of growing vacancies for the previous quarter. The survey shows the amount of vacant space is also rising in most decentralised office markets.

For combined Premier A and B grade offices:
Cape Town CBD is at 10.5% up from 9.7%.
In the Southern Suburbs: Claremont is at 13.7%; Rondebosch & Newlands 7.3%.
In Tygerberg, the Bellville vacancy average is 9.4% whereas a year ago it was 6%.
Office vacancy around the broader V&A Waterfront precinct is at 6.9 per cent.
Pinelands is at around 3.4%. Century City however has dropped over the previous year to 8.8% from 10.5%.
Here development activity has increased dramatically, with works on the Estuaries 2, Park Lane and the Bridgeways Precinct currently in progress.

There is some evidence that tenants have attempted to reduce their rental bill by securing cheaper space. This may have played a role in underpinning the demand for affordable CBD space.

Looking at smaller business owners, it may be that many people have gone back home to set up office in the garage – back to cottage-work environments away from the big city.

The point that vacancy rates are growing in Cape Town should not come as a shock. While weakening economic circumstances reduce the demand for space and increase vacancy rates, it is equally important to consider the effect that lagging development activity has on the market. Vacancy rates rise and fall because development activity is often poorly co-ordinated with demand.

Of course an obvious down side for property owners is that a rise in vacancy rates also has the potential to increase operating costs. In an environment of rising vacancy rates, property owners have little choice but to absorb operating costs that would normally be passed on to tenants. This issue has become particularly pertinent to South African property owners in general who have experienced a significant rise in electricity costs which would normally be passed on to tenants.

But the are some people that are looking ahead at the future of space in Cape Town with a steady confidence in the long term office market. In the Clock Tower precinct for example, Allan Gray is making its presence felt with a confidence inspiring project.

The new Allan Gray building is a R1 billion mixed use complex and claims to be one of Cape Town’s first Green buildings. The development is the biggest at the V&A Waterfront since the state-owned Public Investment Corporation (PIC) and Growthpoint Properties bought the iconic landmark for R9.7bn earlier in 2011.

Another office development worth mentioning is the new Portside building which will be the provincial headquarters of FirstRand’s three principle divisions: FNB, Wesbank and RMB. There will also be  an additional 25 000m² of prime space up for grabs for leasing to corporate and retail tenants. The project on the corner of Buitengracht Street and Hans Strijdom Avenue is a partnership between First Rand and Old Mutual, it should see completion by 2014. This bodes well for the precinct buoying up confidence in the area.

Other projects in Cape Town in the near future would include the new 20 storey building on Bree Street that will host legal offices and present more office space to fill. Currently underway is the 18 storey The Mirage hotel and mixed use development that should be complete by 2013.  Cape Town International Convention Centre, which includes new convention space, office space, apartments, as well as a hospital is also on the cards. By the time these projects mature the hope is that the world will be a friendlier place for landlords.

Worth noting is that there are also some up sides to the economic downturn effects. The vacancy trend has created some opportunities for tenants. Some companies have felt the confidence to shelve elaborate expansion plans and others who were facing relocation now have negotiating space. Landlords are far more willing to exercise a little creativity, offering concessions and making opportunities available that would not otherwise have been available in a low vacancy market.

So as long as Cape Town keeps its head down building for tomorrow’s prospective tenants and looking after the one’s it currently has, it should be able to weather this storm.

Urban Decay in the Mother City

In this day and age of rapid urbanisation no city is immune to urban decay; one might suggest that it is part of the lifecycle of all urban environments. Cape Town is no exception as it faces having to create what’s being termed “a Problematic Building’s Unit.”

The unit was formed last December to focus on and deal with derelict properties, which were contravening regulations, including those relating to fire and health.  This move is a partnership with the city’s Human Settlements Department .The unit has now come up to speed with the city’s most severely affected buildings.

A bylaw was passed last year initially identifying 280 problem buildings. By half way through the year there remained 160 buildings under investigation throughout Cape Town – in the city centre, Mitchells Plain, Durbanville, Salt River and Camps Bay.

Cape Town also has a dedicated Social Housing Police Unit that is focusing specifically on city council rental properties.  There are approximately 49 000 council-owned units.

Problem buildings can generally be defined as properties that contravene national building regulations; are overcrowded or in an unacceptable state; are the subject of numerous complaints from the public; invaded by squatters; or pose a serious health or safety risk. The city council has advised owners to repair, demolish or sell these buildings so that action will not have to be taken.

Further action includes the City of Cape Town’s intention to publicly name and shame those owners, landlord and tenants who fail to comply with the Problem Building by-law. In addition the intention is to amend the by-law so as to make it illegal to even enter these premises. One can’t help but wonder what level of embarrassment exists for slum-lords and drug-lords.

It’s common knowledge that Johannesburg has had to fight this battle for some time. Initially the Better Building Programme was set up to restore derelict buildings and take back parts of the city in severe decay but the process proved laborious, taking as long as two years to get one building through litigation and judgment. Now transitional housing, BBP’s biggest stumbling block, will be provided to current residents of buildings that will be refurbished by the specially formed Transitional Housing Trust (THT) which will manage the process.

Now BBP has evolved into the Inner City Property Scheme (ICPS).  The City of Johannesburg has created a restoration solution, though driven by the private sector. A large portion of the City’s property portfolio will be transferred to the ICPS through a series of structured sale transactions. Participants in the Broad Based Black Economic Empowerment (BBBEE) transactions were selected through a Request for Proposal process, and are required to provide a minimum equity contribution of R 5 million. The city would ensure that the option to buy was exercised only once the dilapidated property had been refurbished. Time will tell of course how effective this is.

One can hope that the Cape Town City council will proactively approach the inevitable struggle of urban decay with BBBEE in mind, dealing with urban decay issues simultaneously, by learning from the hard painful process Jo’burg has ploughed through.  The key word that has emerged in Jo’burg has been ownership. This will be hard to impress upon the separate set of problems that come with those derelict building that are council owned. Admittedly the dynamics involved with council owned buildings is slightly different to the privately owned buildings.

Some examples of action taken by the Problematic Building’s Unit thus far:

Vrystaat Street, Paarden Eiland:  14, Fourth Street, Heathfield: The city served compliance notices on the owners, who then started demolishing and clearing the property. 17, Coleridge Road, Salt River: The city bricked and boarded up this derelict building.

The San Remo building in Camp Street, Gardens: This run-down residential block posed a problem for years and a number of drug raids were conducted on it. An inspection of the building with the city’s fire and health departments was held in March. The building is set to go on auction this month.

The Langa hostels: In an attempt to improve the building, the city instituted court action against the owners. This action is currently pending.  Number 13, Torrens Road, Ottery: The city served compliance notices on the owners, who have since sold the building.

Another characteristic of urban decay is the visual, psychological, and physical effects of living among empty lots, buildings and condemned houses. Such desolate properties are socially dangerous to the community because they attract criminals and street gangs, contributing to the volume of crime.

The world best urban restorations have occurred in cities where people take the streets through: firstly ownership – investment, shopping in ones own neighbourhood; secondly civic action- neighbourhood watch and thirdly social up-liftment- engagement with local rec centre programmes etc.

But big business and local government are the players that have to plan ahead to construct a future and not sit back and respond with a knee-jerk laws that ultimately only puts a Band-Aid on a more severe wound. Let’s hope that the Problematic Building’s Unit is not just a Band Aid but one of many steps in the right direction. Watch this space.