Real Estate Investor Magazine South Africa August/September 2019 | Page 16

COVER STORY
Johannesburg’s Urban Development Zone Tax Incentive:
A Catalyst for Inner City Economic Development
JOBURG IS IN THE MIDST OF A NEW GOLD
RUSH. But today’s scramble for investment in Africa’s
world class capital city is not driven by the promise
of gold. Instead, a boom in property development
is attracting smart investors. Led by an innovative
Urban Development Zone (UDZ) tax incentive that
has seen billions of Rands invested in the inner
city as it undergoes a massive spurt of growth
and wealth. Since its roll-out, the tax incentive has
ushered in exciting new development and investment
opportunities into the City of Johannesburg’s Inner
City.
The City has leveraged on this highly successful UDZ
tax incentive to anchor innovative emerging economic
development initiatives in order to attain structural
transformation of the Inner City’s economic and
physical landscape.
The Inner City has the state-of-the art infrastructure
and is already a site of massive investment. The active
promotion of the UDZ tax incentive has attracted over
R25 billion worth of cumulative investment in property
development.
As a result, the Inner City has been physically transformed before everybody’s eyes, with major
developments in new high-rise office buildings and expansions led by the banks, mining houses as well
as multi-national corporations. The associated investments by the major banks have further expanded
their footprints and modernised the Financial Districts with diversified mixed used indices to include
stylish retail and hang-out restaurants.
Emerging Trends: Modern students’ accommodation & middle class residential neighbourhoods.
The emerging property expansion trends also reflect growing shifts in mixed-use indices towards
combinations of students’ accommodation districts, in Joubert Park, Braamfontein and Doornfontein
areas; middle class condominiums , sectional title modern apartments for accommodation of emerging
professionals in the Inner City’s neighbourhoods of City and Suburban, Braamfontein, Jewel City and
New Doornfontein. Further Investment towards trendy office, retail, arts and entertainment facilities and
spaces in Marshalltown, City & Suburban has also spiked. Investment has also gone towards hotels and
hotel apartments to cater for tourists and the growing cross-border shoppers.
Young investors have also taken advantage of the opportunities and invested in sectional title units and
are reaping benefits from their investments. All these investors are major beneficiaries of the UDZ tax
incentive that enables them to claim up to 100% of their investments over time
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AUGUST/SEPTEMBER 2019 SA Real Estate Investor Magazine