February 25, 2004
By Thomas Thale
THE property market in the Johannesburg CBD is experiencing a boom, with developers snapping up available property and rentals shooting up.
This was said by Jabu Moleketi, MEC for Finance and Economic Affairs, when he tabled the Gauteng budget for the 2004/2005 financial-year in the provincial legislature on Tuesday.
"The urban regeneration and tourism projects of Blue IQ are flourishing," Moleketi said, adding that rentals in the CBD had increased from R25 per square metre to R68 per square metre in the past three years. "Not so long ago," said Moleketi, "apartments and penthouses in Corner House, on Harrison and Commissioner streets, were sold out at prices ranging from R699 000 to R1,2-million."
The Blue IQ and Johannesburg Development Agency inner city regeneration projects, said Moleketi, had triggered this increased activity in the property market.
The Gauteng government had invested R350-million into Newtown and over R420-million into the Constitution Hill Precinct through Blue IQ, according to the MEC. This cash injection, said Moleketi, became a catalyst for economic growth. A call for proposals issued in December by Blue IQ and the JDA for five land parcels in Newtown had attracted the attention of some 30 developers, he pointed out.
"A solid contributor to this new found economic resilience and continued growth in the face of adversity has been the Gauteng government's unwavering commitment to changing the trajectory of the provincial economy, which has instilled a level of certainty and continuity for investors and enterprises. That has allowed them to increase investment in the growth areas of the future," said Moleketi.
In Constitution Hill, said Moleketi, three anchor tenants were in advanced negotiations to take up 60 percent of the Phase One office space, which will come into the market in 2005.
Moleketi also announced the launch of Blue Catalyst, "a mentoring and funding vehicle established to assist in the commercialisation of new knowledge intensive business opportunities developed by entrepreneurs". Construction on the Innovation Hub based in Pretoria and focusing on developing "knowledge intensive, high tech start-up industries" has started, and work on site will be completed by November, Moleketi said.
Increase in social spending
The bulk of the R30-billion budget unveiled by Moleketi will go towards social services such as education, health and social welfare. The provincial Department of Education has been allocated over R9,4-billion, the Health Department is to get R8,7-billion while the Department of Social Services and Population Development will get R5,7-billion.
Moleketi said that from 1995 to 2003, the provincial government increased its spending on education from R607 to R1 106 per capita. Health spend per capita went up from R396 to R1014. "Capital spending has increased from five percent of budget in 1995 to 19 percent in 2003," Moleketi said. "Our budget became an instrument through which increased access to education, health and basic needs generally was attained."
The province has also set aside R200-million, over and above the R134-million grant from the national budget, for the provision of the anti-retroviral drugs for people with HIV/Aids.
Moleketi also announced that a total of R1,3-billion has been allocated to Blue IQ projects for 2004/2005.
Economic growth
Despite a decline in the real annual GDP, Moleketi expressed confidence that Gauteng "has a robust and resilient provincial economy".
According to figures released by Statistics South Africa on Tuesday, the real annual GDP increased by 1,9 percent in 2003 following an increase of 3,6 percent in 2002. Moleketi attributed this low real GDP growth to "poor performance by the agricultural and manufacturing sectors". The agricultural sector, said Moleketi, was adversely affected by drought while the manufacturing sector was suffering the effects of a stronger rand.
"But the tertiary sector continued on its growth path, recording a three percent per average growth for the year," said Moleketi.
Still, Moleketi expressed confidence that when the final GDP figures are released, "we will see that the Gauteng economy has out-performed the national economy and has weathered the storm of unfavourable international economic conditions better than the rest of the country". Moleketi expects provincial GDP growth to come in at 3,5 percent, down from the 5,3 percent recorded in 2002.
"I believe we are now firmly on a sustainable, high growth economic path," he said.
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