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Construction frenzy in Sandton, Rosebank signals hope for economy

Jan 04 2018 17:50
Tehillah Niselow

Johannesburg - Standing outside the Gautrain's Sandton station, the scene could be one in any other major city around the world. 

Harried commuters rush past, clutching laptop bags and smartphones, and queues snake outside trendy coffee shops selling cappuccinos and freshly squeezed juices. Construction cranes stretch to the sky, adding to the general din and feeling of expansion and opportunity.

Traveling along the major arterial routes in Rosebank and Sandton, one could hardly guess that the construction sector contracted in the first nine months of 2017, let alone that the country achieved dismal economic growth rates and exited a technical recession last year.

It’s come to be seen as a "bubble" as international law firms, banks and insurers attempt to outdo each other by building larger and ever higher steel and glass skyscrapers in Africa's commercial hub.

And there are even bigger plans for Sandton and Rosebank in 2018, with the developments attributed by the City of Johannesburg to the spin-off the Gautrain has had for the two business nodes.

Eric Raboshakga, assistant director of development planning at the City of Johannesburg, said the focus for now will be developing these business areas, which he said provide guaranteed property values for investors and give businesses a good address.

“Our city was built so it doesn’t function effectively for poor and black people,” he told Fin24

He added that providing infrastructure such as pipes and cabling to townships like Soweto is expensive, and Rosebank and Sandton already have infrastructure opportunities in place.

The City of Johannesburg is working on the Johannesburg Strategic Infrastructure Platform which will be available for public comment in 2018. 

Pricier parking 'to encourage use of public transport'

The plan has three aims: firstly, to increase residential densities in Sandton and Rosebank, bringing down the cost of housing; secondly, to attract greater investment to Sandton and Rosebank, creating employment; and thirdly to encourage people to leave their cars and make use of public transport by making parking more expensive.

One of the largest buildings in Sandton is the new Discovery global headquarters at the corner of Rivonia Road and Katherine Street at 1 Discovery Place, nicknamed "1DP". The health insurer and financial services company has its eye on becoming a retail bank in 2018, and construction of the R3bn behemoth began in 2014.

David Pierre-Eugene, Discovery’s head of group facilities, said the massive structure is the largest new building to be certified by the Green Building Council of South Africa. 

He’s confident that Discovery’s relocation of 5 000 people from the previous building in the centre of Sandton in West Street to the outskirts of the business node will ease traffic congestion.

“Our new location will also be closer to the future BRT stops which should encourage employees to use public transport. [Our] location to the Gautrain is also a benefit as well as our shuttle service,” he said.

The Sandton skyline (iStock) 

Congestion concerns

There are some major concerns around traffic congestion and town planning as the city stretches ever northwards. Brian Kent McKechnie, an associate architect at Activate Architecture, cautioned that both Sandton and Rosebank were both originally planned as low density residential suburbs. 

“The expansion of CBDs in these nodes was never foreseen… infrastructure was planned to cater for low density single family suburban residences. The pressure on road as well as electricity, water and sewage infrastructure in these areas is immense,” he commented to Fin24.

McKechnie adds that commuters and pedestrians should expect increasing levels of traffic congestion in 2018.

“While Rosebank represents a fairly pedestrian-friendly district conducive to public and pedestrian transport modes, Sandton has been designed with little consideration of pedestrian movement, making the successful provision of public transport in the node almost impossible.”

Raboshakga however denies that the City of Johannesburg is giving carte blanche to property developers. He says that every proposal by property developers goes to all departments within the City and if there’s any objection over issues such as environment or traffic, it doesn’t receive the green light.

He said the City is also planning to make parking for residents of the new high rise buildings in Sandton and Rosebank more expensive, in an effort to reduce vehicle congestion in the nodes.

Johannesburg mayor Herman Mashaba 

Low-cost housing a challenge

Since he was elected into office in 2016, City of Johannesburg mayor Herman Mashaba has had to fend off claims by the ANC that he’s anti-poor and doesn't care about social housing. The eviction of residents in the Joburg CBD from hijacked buildings added fuel to the fire.

Raboshakga admits building new low-cost housing is a challenge and the Johannesburg Housing Company is struggling with affordability.

“[The] City has to acquire land to develop social housing at the same quality of the development next door, so it doesn’t decrease the value of the property next door.”

The Johannesburg Strategic Infrastructure Platform, which will be open for public comment later this year, requires property developers to target 20% low cost rental housing stock (R3 500 to R4 000) with every new development the CoJ approves.

Johannesburg, known for its urban sprawl, is also trying to make the city more liveable. Raboshakga said they’re negotiating with developers and require all new buildings on main streets to interface at street level, by either installing a coffee shop or book shop.

But Raboshakga admits public spaces for parks and other non-commercial recreational areas will be difficult to provide in Sandton and Rosebank.

“It’s very difficult to address public spaces because the city doesn’t own much land… Sandton is very expensive, [it's] very difficult to break down a four-storey building and use [the] space for the public”.

Hope for inner city housing

While corporates look to the north, the City of Johannesburg appears to be holding out the Johannesburg inner city as a hope for affordable housing, with a backlog of 30 000 units. 

In October, the council approved a plan to make 12 City-owned properties available to use as low-cost housing in the inner city.

McKechnie said the CBD still retains substantial investment by banks such as ABSA, FNB and Standard Bank who all have their head offices based there, as well as other large corporates like Anglo American, Transnet and the Chamber of Mines.

But he admits there are few incentives to attract newer corporates to the CBD, which has developed a reputation for being grimy and crime-ridden.

McKechnie believes the City should look to stricter bylaw enforcement, “in curbing illegal taxi ranks and unmanaged informal trade if they want to create an inclusive, clean, safe, sustainable CBD and lure back large-scale investment to the district”.

Raboshakga said Mashaba has made inner city development the “number one priority for his administration”. He points to the extension of the bus rapid transit (BRT) system to the northern suburbs, which will still connect via the CBD.

McKechnie agrees that the public transport system in the inner city has been well developed and allows for greater access than that of Sandton and Rosebank.

“Sandton was developed specifically as a move away from the CBD, which was seen as too accessible to workers and lower income people. The CBD remains an inclusive node well serviced by public transport and easily accessible to people from all areas of Johannesburg. There is little provision for lower income people in Sandton; the district is accessible mainly by private motor vehicles."

But for many, the frenetic cranes and glittering skyscrapers in Sandton and Rosebank represent hope for the South African economy, battered by low business and investor confidence in recent years.

The colossal R3bn Discovery building looming over Sandton, said Pierre-Eugene, is a reflection of the health insurance giant's "confidence in the country and our desire to invest in our people”.

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