buildings in areas such as Rosettenville , Malvern and Bezuidenhout Valley .
For the larger , more established investor , there are medium and high-rise residential and commercial buildings in areas such as Hillbrow and Berea where City of Joburg encourages conversion into residential stock . As the market normalises , further opportunities exist for developers to construct Greenfields developments . Lastly , for the risk-taker , there are significant opportunities in light industrial to residential conversion in the near-city areas such as Jeppestown and Doornfontein .
What makes Johannesburg inner city a more attractive opportunity for property investors as opposed to other inner cities such as Cape Town and Durban ?
Johannesburg inner city is a hive of diverse economic activity , close to transport nodes , schools , places of work , entertainment and shopping .
It also boasts the biggest transport node in Africa , with trains , busses and up to 4 000 taxi ’ s bustling through the city on a daily basis culminating at centres such as Park Station and Ghandi Square .
According to TPN , the residential rental default rate is recorded at less than industry averages for areas such as Sandton .
What are Johannesburg inner city property investors ’ main challenges ?
Despite City of Joburg ’ s ambitious plans and precinct developments , the day to day management of the city such as consistent and accurate billing of utilities and a laxed approach to enforcement of bylaws cause the biggest challenges for property entrepreneurs .
Success in inner city residential rental requires a thorough understanding of the area of investment , a hands-on approach as well as knowledge of demographics , demand profiling and the property market . Without the above entrepreneurs may run into challenges .
Who are the residential rental tenants of the Johannesburg inner city ? How does it differ from one inner city area to the next ?
The inner cities tenant demographic is mostly young , formally employed couples or families , unskilled labourers , hawkers , seasonal workers and foreign national entrepreneurs .
Braamfontein offers a normalised residential market , with a high proportion of students . On the other hand , enclaves within the city such as
Maboneng and parts of Braamfontein are attracting eclectic middle to upper-income tenants .
The traditional residential high rise areas of Berea and Hillbrow are increasingly reclaiming their former status as stable residential rental areas for middle income households .
Sadly , there are still a large number of impoverished people living in very dire conditions . Most of these people pay rent to illegal landlords , in some instances without basic living conditions such as running water or electricity . Examples of this can be found in the old warehousing areas of Jeppestown , Doornfontein and New Doornfontein .
Developments & future focus
What significant developments have taken place in the Johannesburg inner city over the last few years ? Significant investment both from the private and public sector has seen multiple people from all walks of life move back into the city . Catalysing public sector projects include Gautrain , the Rea Vaya bus system and the iconic Nelson Mandela Bridge . The private sector has contributed by investing in areas across the city creating affordable and decent living spaces attracting tenants and in turn stimulating local economic development .
What are local government ’ s strategic plans for development ? What is the timeline of this ?
COJ ’ s Corridors of Freedom project has successfully connected outside nodes to the inner city allowing for ease of access and opportunities for more people to earn , work and learn in the city . Areas that have benefited from this include Turffontein , Rosettenville , Bellevue and Yeoville . Further extensions are underway .
In addition a R400 million intermodal transport hub is under construction between Braamfontein and Newtown just east of the Queen Elizabeth Bridge , planned for completion in 2018 .
Turffontein has been further earmarked by the JDA for the development of the Rotunda Park Precinct over the next four years . The Hillbrow Tower Precinct upgrade is also nearing completion .
These public sector infrastructure investments create opportunities for property entrepreneurs to capitalise on investment in the surrounding areas .
RESOURCES
TUHF
www . reimag . co . za AUGUST 2016 SA Real Estate Investor 39