Inner City Property Precincts Revisited
Category Advice
Popularity of Newtown as the socializing hot destination of the city is likely to continue. For the tax incentive scheme introduced in 2003, Government and the city thought they would claim victory in regenerating the previously known "urban development zones". Urban developers would claim 20% of the costs against their taxable income for 5 years.
City Property today is competing with Afhco as the biggest developer of the city converting previous offices to novel residential accommodation, and contributing to 85 000 novel units that the city needs. The tax incentive did not affect their decision to go into the conversion property market in Johannesburg (including areas such as Berea, Yeoville, Braamfontein, and Hillbrow) or even Pretoria. The company started converting a few years prior to the incentive.
The incentive’s hardly affected growth of private developers, believes the developer and researcher of Cape Town Theodore Yach. Anne Steffny Director of the Central Johannesburg Partnership goes further. The incentive in certain aspects is not significant to the paper it has been written on. Paul Jackson, trust CEO of which funds small inner-city investors, believes this is not of importance.
Yet between 2006 and 2010 the estimated investment of Rl0.5bn from the private sector, according to Steffny, will be utilized in the inner part of Johannesburg regeneration projects.
So, the question is what attracts private investors entering the city and buying into investment property. Huge incentives from the local government are civilizing the public spaces, as well as planning approvals, transport, clearance for transfer of property and work related to service billing.
Tax incentive happens to be an easy government alternative where the response to short-term publicity is favorable.
However, “tax incentives are hardly motivational factors for investment," believes agency executive director of the Leapfrog estate Kura Chihota. What really works is the hard grind that one has to go through to make things actually happen.
A mere R570m was spent by The JDA Johannesburg Development Agency on upgrading 6 input zones of the city late last year which are as follows: Ellis Park, Newtown, the fashion district Braamfontein, the high court, Hillbrow and Berea.
It's too early for results to show from the Rl70m that has been spent on the pavements and streets. Even though in eight years R400m was spent on another 5 districts at the same time there was an earning of Rl3bn property transactions which includes buying and selling of properties without upgrades.
It’s clear that the private sector reacts only when investment is "multicausal”, Lael Bethlehem the JDA CEO concedes. This creates opportunity through which there are big results.
City Property today is competing with Afhco as the biggest developer of the city converting previous offices to novel residential accommodation, and contributing to 85 000 novel units that the city needs. The tax incentive did not affect their decision to go into the conversion property market in Johannesburg (including areas such as Berea, Yeoville, Braamfontein, and Hillbrow) or even Pretoria. The company started converting a few years prior to the incentive.
The incentive’s hardly affected growth of private developers, believes the developer and researcher of Cape Town Theodore Yach. Anne Steffny Director of the Central Johannesburg Partnership goes further. The incentive in certain aspects is not significant to the paper it has been written on. Paul Jackson, trust CEO of which funds small inner-city investors, believes this is not of importance.
Yet between 2006 and 2010 the estimated investment of Rl0.5bn from the private sector, according to Steffny, will be utilized in the inner part of Johannesburg regeneration projects.
So, the question is what attracts private investors entering the city and buying into investment property. Huge incentives from the local government are civilizing the public spaces, as well as planning approvals, transport, clearance for transfer of property and work related to service billing.
Tax incentive happens to be an easy government alternative where the response to short-term publicity is favorable.
However, “tax incentives are hardly motivational factors for investment," believes agency executive director of the Leapfrog estate Kura Chihota. What really works is the hard grind that one has to go through to make things actually happen.
A mere R570m was spent by The JDA Johannesburg Development Agency on upgrading 6 input zones of the city late last year which are as follows: Ellis Park, Newtown, the fashion district Braamfontein, the high court, Hillbrow and Berea.
It's too early for results to show from the Rl70m that has been spent on the pavements and streets. Even though in eight years R400m was spent on another 5 districts at the same time there was an earning of Rl3bn property transactions which includes buying and selling of properties without upgrades.
It’s clear that the private sector reacts only when investment is "multicausal”, Lael Bethlehem the JDA CEO concedes. This creates opportunity through which there are big results.
Author: IMAGINE Properties