August 19, 2003
By Bongani Majola
THE heart of Johannesburg is seeing a notable economic resurgence, with the latest being the sale of 111 Commissioner Street for R54-million.
And with the financial strengthening of the pulse of the inner city, comes growing business confidence and increasing investment opportunities, says Joburg's economic development director Lael Bethlehem.
The renewed interest in inner city properties, says Bethlehem, "demonstrates the rising tide of economic development and shows that Johannesburg's regeneration efforts are paying off".
Last week ApexHi Properties announced it had acquired 111 Commissioner Street, the former Southern Life building. A prominent part of the skyline, the 18-storey building is one of the city's landmarks, situated on the corner of Commissioner and Eloff streets.
The building, with an area of 20 000m² of space to let, is home to the Gauteng Department of Education, while Woolworths and Juta's are its major retail tenants.
Once a drab, grey and indistinct skyscraper, 111 Commissioner Street has been given a radical facelift, boasting baked aluminium décor surrounding the base of the structure, while the top floors are covered in glass, giving the building a shimmering chic look. "We have also upgraded the lobby and installed a new security system in the building," says ApexHi CEO Gerald Leissner.
ApexHi has acquired a total of 36 inner city buildings in the past year, Leissner added. "This building fits the company's profile in that it has a stable A-grade retail tenants with long leases, is fully let and is expected to yield a 16 percent return."
The property company now owns a total of 43 buildings in the key economic growth areas of the inner city and Braamfontein precincts. These properties alone account for 26 percent of the total area to let in ApexHi's portfolio.
"In considering properties for acquisition, our strategy involves assessing factors such as vacancy rates, the quality of the tenants, and the quality of the building rather than the building's location. For this reason, we are happy to say that our high-yielding properties are situated in the Johannesburg city centre," says Leissner.
Others share his confidence in the growth in the city centre, with the city centre home to the provincial and local government offices, the law courts, and several public corporations.
Alongside this are the numerous regeneration projects being undertaken around the inner city, including the Newtown Cultural Precinct, the Fashion District and the Metro Mall.
Neil Fraser, executive director of the Central Johannesburg Partnership (CJP), an inner city renewal initiative, says he is thrilled by the upturn in interest. Passionate about inner city development, Fraser points out "whereas there were hardly any sales of inner city buildings a couple of years ago, property deals are now being negotiated all the time".
As a result of this upsurge of interest the CJP, together with the City of Johannesburg's economic development unit, has started to consolidate information about all the buildings in the inner city. "We want to have all the buildings listed. Information about the owners of the buildings, such as their contact details, will be accessible from both CJP and our offices," says Johannesburg Property Company's executive director Leila McKenna.
In addition, McKenna says, "there's a substantial interest in residential stock from a number of small entities". A lot of small businesses also want to find office space in the city.
Currently the Johannesburg CBD has 7 000 000m˛ of floor space, with 300 000m² of this office space. This represents an investment of R19-billion, says Shaun O'Shea, Region 8 communications manager. Region 8 covers the city centre and surrounds.
"Planning and building control are key components of the Inner City Regeneration Programme, which focuses on maintaining the quality of buildings and addressing decay within the region," says O'Shea.
"We look forward to along significant relationship with ApexHi," O'Shea added, congratulating the company on its latest acquisition.
