Real Estate Investor Magazine South Africa October 2018 | Page 46

INNER CITY DEVELOPMENT
Urban regeneration
is it viable in South Africa today?
BY EDITORIAL
A
s cities age, buildings deteriorate and become over-
crowded. Residential areas expand further from the
CBD, causing commerce to follow, until the city cen-
tre is merely a ghost of its former self. Rentals drop, vacancies
rise and criminal elements often move in, making an erstwhile
vibrant CBD dangerous and unproductive for both commerce
and residents. Investor portfolio values drop to a new low, and
this is when it becomes clear that there is a need to regenerate
the area, or accept a loss and sell out. Regeneration has been
accomplished in many cities of the world, including in South
Africa. “Looking at the remarkable changes taking place in
Cape Town, Johannesburg and Pretoria, it is obvious that regen-
eration is both possible and successful, if thoughtfully execut-
ed,” says Leon Breytenbach, National Manager of the Rawson
Property Group’s commercial division. However, it is essential
that local municipal and business leaders buy into the exercise.
A well-planned layout is required  
The entire CBD layout must be considered. Allowance must
be made for structures like national monuments which may
not be altered, yet require a face-lift, bearing in mind that
they are tourist attractions. Optimal locations must be selected
for hotels, shopping malls and entertainment venues, with
sufficient space reserved for open public areas and easy access
to transport. “Sufficient parking, both street bays and high-rise
parking garages, will be required, while traffic flow may need to
be changed to single-direction to cope with the traffic volume,”
Breytenbach suggests.
Public transport
“Public transport must be assessed and, where necessary,
improved upon,” advises Breytenbach. Outdated bus transport
may need updating with systems like Rea Vaya in Johannesburg,
MyCiTi in Cape Town or A Re Yeng in Tshwane. Bus stops
and taxi ranks should be modernised and strategically placed
to ensure efficient service and increased commuter capacity.
Access to all areas of the city is vital for the workforce, residents
and visitors. Rail systems are important for transporting
the workforce, consumers or cargo; the Gautrain between
Pretoria and Johannesburg has proved invaluable, having eased
commuter congestion on the highways while reducing traffic in
both cities.
A healthy mix between residential and com-
mercial
A balance between retail, offices and residential property is
necessary to make urban regeneration sustainable. Overemphasis
on the residential aspect is not optimal, for although residents
must be able to live in and enjoy the area, the commercial
aspect must also be expanded. “When urban regeneration
and inner-city revitalisation achieve stasis, the rates per square
metre on commercial buildings should increase, too,” explains
Breytenbach. As the rates per square meter improve, further
investment is attracted into the area, confirming the success of
the urban regeneration.
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OCTOBER/NOVEMBER 2018 SA Real Estate Investor Magazine
Reuse of buildings
Tidying up a few old buildings with a fresh coat of paint may
increase the general appeal of the area, but will add little to the
economic side of urban regeneration. Older buildings need
not be demolished; they can be inventively revamped into
apartments, hotels or modern, mixed-use entities. Old office
blocks become attractive hotels or apartments; former retail
outlets become entertainment venues; and outdated factory or
warehouse premises become wonderful malls, craft-markets,
eateries or cinemas. It takes a little vision as well as some finance,
but the rewards can be pleasantly surprising.
Communication
High-speed fibre and Internet connections are essential for
modern businesses and residents in the area. Service providers
often lay down the infrastructure for these communication
services at their own expense, normally prioritising areas with
an established residential and commercial base. Areas requiring
urban regeneration are seldom prioritised. “Service providers
mainly engage in large capital outlay in densely populated
sectors which can support the investment, but people and
businesses first need to be attracted to the area,” Breytenbach
remarks.
Informal trade
There is often a plethora of informal trade in a run-down
CBD, which one does not want to wipe out completely after
regeneration. Regulated hawkers with goods appealing to
passers-by, such as fruit, souvenirs and curios, can also be a
drawcard. Pedestrians don’t enjoy being mobbed by informal
traders or tripping over merchandise on the sidewalk, so
providing designated trading areas with an appropriate number
of operators could prevent problems.
Safety
The general public want to shop and walk through the city in
relative safety. Commuters require safety when travelling between
their jobs, while shopping and during leisure activities;  businesses
require 24-hour security and will not remain in an area if crime is
prevalent. Taxi ranks, train stations and bus stops are prime target
areas requiring security personnel on permanent duty. A metro
police force or a central improvement district presence assigned
to keep the inner city safe would help to alleviate the reservations
of the populace.
In conclusion
Regeneration takes imagination and foresight but can, in time, be
financially rewarding. “Initial rentals and purchase prices may be
low but, as the area improves, vacancies will reduce and consumers
will be drawn back, causing the value of the original investments
to increase exponentially,” says Breytenbach. A run-down CBD
is not good at all, but the glow of success when such an area is
successfully regenerated will spread throughout the entire city.
SOURCE
Rawson Commercial Property
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