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Rosebank – While you were sleeping

Looking at the Rosebank skyline one gets used to seeing cranes. As one comes down so another pops up. Although many observers are sitting up and taking notice of Rosebank as an area under redevelopment, locals will tell you how refurbishments, acquisitions and new buildings have been rumbling on for some time now.

Rosebank Skyline

According to the Broll Office Market Report, Rosebank is being revived with great retail and exciting new office developments supported by the surrounding residential nodes and the Gautrain station. Rosebank is fast becoming the city’s third high-rise business centre after Sandton and the inner city.

Artist Impression of the finished Standard Bank Complex

The cranes are certainly busy in the block bordered by Oxford Road, Baker Street, Cradock Avenue and Bolton Road.  This was the short lived address of the office building 30 Baker Street, the Lindsay Saker dealership and the Sanlam Arena. Some may remember how the Sanlam Arena was built on the site of the old Arena Theatre- hence the name. Prior to that, this was the site of the Rosebank Primary School before it moved to its current location in 1974.

Johannesburg City council relaxed its height restrictions and approved SBREI’s high-density office and retail development on the southern side of the precinct. Phase one is the construction of an 11-storey building. The bank has the rights to go up to 20 storeys but has opted for a lower building with a larger footprint. Standard Bank was one of the first companies to join the Green Building Council in 2008. As a green building, it should be more energy and resource efficient. The Standard Bank development will comprise 125,000sq m mixed-use development. The bank’s new property will cost R1.6 billion and should be finished off this year.

The property will accommodate 5 600 Standard Bank employees and is aimed at alleviating some of the stress placed on the bank’s current infrastructure. Standard Bank has over 60 000 square metres of office development and the iconic Oxford Corner is all but complete offering 9 000 square metres of premium-grade office space.

The news that has slowly unfolded over the last year has been Hyprop’s intentions for the block encompassing the Rosebank Mall, Tsogo Sun (formerly The Grace) and Cradock Heights.

On the corner of Cradock and Tyrwhitt Avenues Hyprop has purchased Cradock Heights, a commercial property with a GLA of 4,745sqm. Hyprop also purchased a 70% undivided share in the office park Nedbank Gardens on Bath Avenue directly opposite the Mall. This landmark building was demolished earlier in April this year.

The demolition of Nedbank Gardens

“Through the two acquisitions Hyprop is consolidating its presence around the Mall to maximise densities and improve connectivity to the office precinct and Gautrain station,” said Financial Director Laurence Cohen.

In short Hyprop intends on almost doubling the Rosebank Mall’s lettable area from 35 000sqm to 62 000sqm, an increase from 101 stores to 161 at a cost of R920 million. The expected yield is 7%. The extensions to the mall will span Bath Avenue and link to the former Nedbank Gardens site. Five new basement parking levels will be constructed here and will be accessible via both Sturdee and Bath Avenues for increased convenience.

The existing centre will remain accessible via Baker Street and the entrance adjacent to the Shell Garage on Bath Avenue. Construction on the 25 month project began in August and is expected to be completed by September 2014.

A number of well-known local and international brands are already secured for the new space. New tenants include retailers with household names like a full line Woolworths Platinum store, a double level Edgar’s department store, Dis-Chem, Mr Price Sports and Jet.

Existing tenants including Stuttafords, Truworths, Mr Price, Queenspark and Foschini, will all be upgraded or expanded to offer the latest new store concepts and merchandise.  Other new boutique offerings include Pringle, Ben Sherman, Kurt Geiger and Earthchild.

Rosebank is one of the few urban areas in Johannesburg with a strong pedestrian culture and a thriving street life. When asked about the new development’s influence on that, Hyprop chief executive officer Pieter Prinsloo told property24 that: “We intend capitalising on these characteristics by creating strong physical linkages with the natural urban corridors that connect the lower Rosebank office blocks to the upper retail parts and the Rosebank Gautrain Station.”

The redevelopment will also connect to the new Tsogo Sun hotel, 54 Bath, as well as create a north-south pedestrian walkway between the Standard Bank development on Baker Street and the taxi rank on Cradock Avenue.

The Tiber

But the Rosebank Mall isn’t the only mall where there is movement. Diagonally opposite the Firs on Biermanann Avenue is the Tiber on Oxford Road which is still taking occupation. After many years of contentious redevelopment applications constrained by the remainder of a half-destroyed historical building, development approval was finally given in mid-2008 for an office building at the well-known corner of Jellicoe Avenue and Oxford Road. The building is intended for offices only and measures 8,416 m² of offices over eight floors.

What’s coming to the other part of the same block housing the Tiber is the big news. Directly opposite the Firs will be “The Bierman”, the name may change, designed by GLH Architects, it will comprise two linked structures made up of glass and green walls. This will bring over 30 000 square metres of office space to let to the Rosebank office market. The Bierman will accommodate three floors of basement parking space, an atrium level, three above-ground parking levels, and 9 floors of office space. That’s 12 floors above ground.

Artist’s model of the Bierman

Although still at the proposal stage, it’s disappointing to note that there is no mixed retail component in the plans given that Rosebank is such a pedestrian friendly community. The Firs is in the heart of pedestrian movement in Rosebank which is strongly emerging as an investment node. The centre was originally built in the 1970s and underwent a multimillion rand redevelopment in September 2009.

A more recent redevelopment included a new restaurant piazza which provides synergies with the rest of Rosebank’s pedestrian and street-level shopping complexes. The restaurant piazza opens onto Cradock Avenue and is intended to create a seamless flow with the rest of the Rosebank shopping node.

The Firs itself has changed hands – Investec Property Fund has acquired the landmark, mixed use retail centre for R272m. The fund purchased the property in a related party acquisition from Investec Property as part of its intention to build its portfolio. Investec Property Fund CEO Sam Leon describes it as “a trophy asset for the fund in that it’s a high profile asset poised for on-going growth.”

Perhaps just a footnote as far as development is concerned but worth mentioning is The Rose, a development going up on the corner of Sturdee and Jellicoe Avenues. This high-end four-storey building, which offers 2,852m² of office space and 100 parking bays, is being built opposite the Rosebank Primary School.

Finally The Zone. Already a formidable presence in Rosebank with some 123 shops and a four star Holiday Inn, The Zone II is still a long way from completion. The Standard Bank building on Cradock Avenue is still to be torn down and further building to take place. The Zone Phase II offers loft offices and two floors of retail. Pedestrians can gain access from Oxford Road and Tyrwhitt Mall, and via a direct entrance to the Rosebank Gautrain station and Bus Rapid Transport system. The Zone Phase II integrates with The Zone Phase I on the south side and The Firs on the north.

The Rosebank Management District and Lower Management District have been working in conjunction with various government and private partners to reduce crime, clean up the area and increase service delivery.

“Rosebank is reviving, with great retail and new office developments which are well-supported by the surrounding residential nodes and the Gautrain station,” said Jane Parker, area specialist and commercial broker at Broll commercial property services group.

Rosebank has so much more to offer than mere office space: A pulsating African Craft Market, a Sunday rooftop market, 8 Hotels, 220 retail outlets (with more to come when The Mall redevelopment is finished and the Zone phase 2 is complete.) nearly 50 restaurants and cafes, 7 night clubs, 10 art galleries, 20 cinemas all linked with a vibrant pedestrian friendly network of concourses and walkways. It’s no wonder that there are cranes on the Rosebank skyline.

Sandton Builds a Park

It may seem hard to believe but amongst all that high priced real estate in Sandton’s CBD someone made room for a park. But it’s taken the involvement of no small amount of players for green to shine out of that grey concrete jungle.

The Sandton Central Management District (SCMD) has had the intention of creating and maximising use out of the area’s public spaces for some time now.  Johannesburg City Parks handed over a tract of land on the corner of Grayston and Sandton Drives last year and nearly forty indigenous trees were planted to seal the deal as it were.

The current name of the park is deceptive: Sandton Central Park is actually on the very edge of the CBD on the border with Parkmore. Depending on your level of fitness and the length of your lunch break, the park is within walking distance of quite a few Sandton office blocks (SA Brewries for example) and hotels. It may seem a little out of the way to some given that it’s at the bottom of quite a steep hill.

Much is being made of Sandton CBD’s carbon foot print and how much the park will bring some relief in that regard. SCMD city improvement district manager Paul Van Rooyen has been quoted as saying: “We adopted an eco-friendly approach and developed a recreational area that will not only serve as an addition to Sandton Central, but something that will also mitigate Sandton Central’s carbon footprint,”

Carbonworx CEO Mark Smith says that the initiative will put the Sandton precinct on the international map because of its providing a platform for climate change, the community and biodiversity in general.  (Carbonworx, which has its hand all matters green, is choosing indigenous trees for the project.) Ambassadors for Carbonworx, top South African rock band The Parlotones, also attended the tree planting ceremony to promote the CarbonWorx drive, which invites people to calculate their carbon footprint and buy trees to offset their impact.

Urban Genesis which claims to be a pioneer in urban management renewal,  manages  the SCMD. Its core business being the establishment and management of improved city districts.

The first phase of the development of the park will involve the important and strategic placement of trees and shrubbery. From there a very specialised sculpting of the landscape will be put in motion as well as the equipping of seating areas and a children’s recreation zone. Further to this, well paved paths and a jogging trail are planned.  For those who won’t be walking to the park from nearby offices or the adjacent residential area of Parkmore, secure parking is to be arranged.

The project is sponsored by Standard Bank and a partnership exists between Johannesburg City Parks, SCMD and marketing company Smile Media, which arranged the park’s hosting of income generating  advertisement signs. The earnings of the advertising will cover a three-year maintenance management agreement.

Johannesburg City Parks senior manager Oscar Oliphant has been quoted as saying that this open space has been due for a facelift for some time. It’s clear that the park will have a significant greening effect and be a way for business in the area to give back in attempting to reduce the carbon footprint of the CBD. The spin off for the local residential community is also a plus.

South African Shopping Malls: Economic Slowdown, what Economic Slowdown

While most of the world has been tightening belts, trimming off fat and slashing budgets, in shopping mall land it seems to be full steam ahead, regardless of the current economic climate.

In November 2011 Sandton City expanded by 30 000sqm to 215 000sqm, 144 000sqm being retail space.  Its Edgars store was upgraded as the flag ship store for Edcon to 12 000sqm.  Throw in another 58 new retailers and by year end Sandton City had mushroomed like never before. Reinventing itself again, keeping its image fresh and exciting attracting names like  Lacoste, Paul & Shark, Guess, Lacroix and Nina Ricci  as well as Hugo Boss and a host of other glittering international brands.

Sandton city continues to be a catalyst for retail growth for the whole of Sandton CBD which itself is in the middle of a mini construction boom. However one may spare a thought for the Village Mall, which is scheduled for demolition next year. This is to make way for the first of a four phase redevelopment on the site scheduled to begin in 2012.

The Liberty Promenade Shopping Centre in Mitchell’s Plain, Cape Town was formally launched by Liberty Properties this year, following a refurbishment investment of over R500 million, adding 24000sqm, an increase of close to 30% in the complex’s retail real estate.

Middelburg Mall saw an increase in GLA (gross leasable area) from 34 000sqm to 43 000sqm this year. It now stands at 95% let ahead of its 2012 opening, so no white elephant here. The mall will open with a mix of 94 stores including Checkers, Woolworths, Edgars, Pick n’ Pay and Game. Expansion potential has been built into the mall in anticipation of a GLA increase to as much as 50 000sqm. So more expansion is on the way.

Bryanston/Sandton gets yet another shopping centre in the new Nicolway Shopping Centre, which opens for trade in Sandton in April 2012. It will be home to three supermarkets and a range of handpicked restaurants and coffee shops, with an emphasis on quality and personal service. With direct access from William Nicol Drive, the 23 000sqm centre will offer South Africa’s first new-concept Woolworths supermarket, a Food Lovers Market and a Checkers.

On the other side of Sandton, in response to demand from both retailers and shoppers, the successful Pan Africa Shopping Centre in Alexandra will expand by 2 500sqm. The expansion began in December and is scheduled for completion by early 2012. Pedestrian and vehicle counts show that more than 10 000 people use the area daily, along with some 1500 taxis. The expansion will bring new retailers – including Mr Price, Truworths and Clicks – into the mall, to join the other 60 stores already trading.

Right on the doorstep of a recently completed R50 million sectional title residential development, the R360 million Protea Glen Shopping Centre is described as the only retail destination in this area of mushrooming residential developments. Retailers are moving quickly to secure space in the 30 000sqm development. The centre will have a selection of 90 stores when it opens for trade on 27 September 2012. A second phase is already planned. A 3500sqm Shoprite and a 3500sqm Pick ‘n Pay will anchor the new centre.

Resilient Property Income Fund, one of the largest retail property investors in the Mpumalanga and Limpopo provinces, started development in October this year, on the new Burgersfort Mall regional shopping centre, scheduled to open in April 2013. The mall is situated on the main intersection of the R37, which runs between Polokwane and Burgersfort and the R555, which links Steelport to Burgersfort. The first phase of the centre will comprise of some 40 000sqm, with expansion potential of up to 75 000 sqm. It is to be anchored by Edgars, Game and Shoprite. The company’s investments include, amongst others, shopping centres in Mussina, Tzaneen, Thohoyandou, Mokopane, Nelspruit and Polokwane. It is also the major owner and co-developer of the recently opened Mall of the North shopping centre, which is currently the largest centre in the far northern part of the country.

The Mall@Carnival has recently turned the East Rand upside down with the opening of Phase 2, which moved Mall@Carnival into a Super Regional Shopping Centre with a GLA of approximately 72 000sqm. The Phase 2 was opened on 22 September and is already trading well above expectations.

Bay City West Mall is a new regional mall concept for Port Elizabeth. The mall will encompass a retail mall, office parks, residential nodes, private schools with associated sporting facilities, hotels, a hospital complex, motor city, a light industrial precinct and a lifestyle centre. The first phase is the retail mall, construction has begun with completion expected to be in March 2013.

Bridge City, in Durban’s Kwamashu/Phoenix intersection has been trading since Oct 2009. But phases of this urban renewal project continue to be built which includes, among other things, residential apartments, a hospital, a magistrates court and government offices.  This October saw the completion of Bridge City’s underground railway station situated beneath the mall. The development which is being linked to a bus and taxi hub will be an intermodal transportation facility easing road congestion and providing convenient transportation for about 613,000 residents in the surrounding areas of lnanda, KwaMashu, Ntuzuma and Phoenix.

Other high profile refurbishments/extensions include:  Elim in Limpopo gets a 50 store centre next year, Tokai’s Blue Route mall is being redeveloped to create 56 000sqm of retail and entertainment space by next year including a Checkers/Hyper. The Grayston Mall in Sandton is having a multimillion rand facelift. The grand opening of The Greater Edendale Mall was on the 29th September this year, it has hit an astonishing foot count of 1.2 million people. Then there’s Diepkloof Square Community Centre, a project set in the heart of one of Soweto’s most affluent arears, Diepkloof Ext3. It includes 39 shops with Pick n’ Pay as anchor.  Overport City in Berea, Durban is to get a R100million upgrade. The Ballito Bay mall seems to be rising above its bitter wrangling with competitors and community and is finally reaching its completion.

This year also saw the landmark purchase of Cape Town’s V&A waterfront. SA’s largest listed property fund, Growthpoint Properties and Public Investment Corporation announced in February this year, that they had bought, in equal proportions, 100% of Lexshell 44 General Trading for R9.717 billion. A hard act to follow. On a much smaller scale Fountainhead Property bought a 25% stake in Centurion Mall for more than R751million. Investec Property Fund, which listed on the JSE in April, said to be on an acquisition trail, announced on 25 October this year, that it had bought retail complex Great North Road Plaza in Musina for R145m. The 86 shop South Coast Mall also went on auction later in the year for an undisclosed amount.

Space prohibits further tabulation of the many other developments on the shopping centre front. Sufficient to say that although Shopping Mall development both new and upgraded is a long term strategy, it’s clear that there is a great deal of confidence in the future of retail in South Africa. Record prices for large malls and high occupancy rates in many centres reveals optimism about where to invest in the future.  One may be tempted to say: “Economic Slow-down, What Economic Slow-down?”

Sandton – Hard Sweet work or Sweet Hard work?

The Greek philosopher Aristotle wrote that change in all things is sweet. Scottish comedian Billy Chrystal said that change is just a lot of hard work! Witnessing the changes to the SandtonCBDskyline you may see something sweet here and there, but it’s mostly the result of a lot of hard work.

 

Much has been publicised about SandtonCity’s big R1.77bn first phase expansion. One can’t help draw attention to Sandton City’s retail space expansion to a total of 143 690m² upon completion of the first phase this month, taking the complex, which includes the Sandton hotel and office component, to 215 000sqm. But there is more happening in Sandton besideSandtonCity.

 

Part of what was once referred to as the wealthiest square mile inAfrica, the Village Walk,  these days only attracts a steady stream of JSE visitors’ vehicles seeking a parking space. Management of the once thriving collection of eateries and fashionable boutiques seemed to lose any sense of vision in the early 2000s. The once fashionable in-spot of the 90’s, sadly, has discount posters in its windows and wispy tumble-weeds of litter blowing about its courseways.

 

Having started as a rumour earlier in the year, it’s now conventional wisdom that the Village Walk will be demolished and even that 60 year old Grand Dame the Balalaika Hotel will be torn down and resurrected on the corner ofMaude StreetandRivonia Road. Of course it was never a matter of competing with its two sistersSandtonCityandNelson Mandela Square, rather it will be a matter of complementing and supplementing those enormously successful retail and entertainment venues. The current Village Walk basement will be retained and two floors of retail and some office space will be layered above. The whole development will be in four phases over eight years. Only a couple of blocks from the Gautrain station the venue has exciting potential. An international hotel is also on the cards making up the rest of the 180 000sqm of the project’s space.

 

Investors are showing enthusiasm for the acquisition of land or buildings for redevelopment close to the Gautrain station and it is envisaged that the area surrounding the station will be the centre of sustainable growth in the value of commercial property. There are even plans afoot to build above the station itself!

 

115 West Street, right opposite the station, is the future site of the Alexander Forbes head office for its approximately 2200Johannesburgstaff. The refurbished, eight storey 36 950m² office building will be embracing some green building codes with all natural light and energy efficient lighting. Throw in super fast lifts and state-of-the-art auditoriums  stuffed with all the latest technology, a gym, snazzy coffee shop and staff restaurant and you have a self contained little urban island. Nebank is putting up the R840 million funding for the development. This will become Zenprop’s Properties’ flagship of South African commercial properties. Alexander Forbes is expected to take occupation of the building on1 October 2012.

 

Characterised by a large number of owner occupied developments and with the majority of international banks, the JSE Securities Exchange, legal and management consultancies, Sandton, is widely acknowledged as the premier financial district inSouth Africa. There are currently over thirty development applications for the SandtonCBD, which includes  zoning changes  and renovations.

 

One such revamp is Southern Sun’s landmark Grayston Hotel. It’s closing its doors next month with a proposal having been lodged for the redevelopment of the building.

 

Other developments on the boil are 20 000sqm of sectional title office space on the corner of Katherine and West Streets – for occupation in 2013; 6 Sandown Valley Crescent, with a gross lettable area of 18 000sqm and a projected completion date of mid-2011; 16 000sqm at 1 Protea Place, with Cliffe Dekker Hofmeyr Attorneys as a tenant plus other smaller tenants; and Sandhurst Office Park, where 26 000sqm of office space becomes available in 2013.

 

Much of the demand for development seems to revolve around the financial sector. Developments planned over the next five years include: 9 000sqm at140 West Street; 35 000sqm for Standard Bank at11 Alice Lane; 150 000sqm on the site of the old Sandton municipal offices; and atFNBTowers, 25 000sqm of additional space.

 

One of the biggest changes to the Sandton skyline will be on the corner of West, Stella and Rivonia Roads. Insurance giant, Old Mutual, wants new headquarters inSouth Africa. Its answer is to build a multi-storey office precinct next to the Gautrain station. Old Mutual is to move their head office fromPresident Streetin Jo’burg’sCBDto where theChadrien Placebuilding stands, at the corner ofRivonia RoadandWest Street. The first 50 000 square meters will be ready for occupation by 2013, and the final product will be a 35 storey building.Chadrien Placeis currently an ageing Tudor-style block of 33 flats. On average units were valued at about R1,5m a couple of years ago. That all changed thanks to the Gautrain. Old Mutual is believed to have paid R400 million to a development consortium for theChadrien Placesite.

 

Finally on the auction front, one gets an idea of the demand in theCBD. During Auction Alliance’s September multiple auction event, two A-Grade office blocks in the heart of the SandtonCBD, offering a first rate development opportunity, were sold for R48.5 million. With A Gross Lettable Area of 2530sqm, this represents a bulk value of over R19,000/sqm.

 

There may be an economic down turn, but the future for Sandton looks set to change. For some it’s going to be sweet, for others, a lot of hard work.

Learn More about Sandton visit www.eprop.co.za