CBDs and industrial and commercial areas in big cities all over the world are being redeveloped and re-imagined to cater to growing demands from the "live, work and play" market.
The decline of many commercial and industrial urban precincts and central business districts globally as a result of urban decay, economic shifts and obsolescence during the past few decades has spawned a plethora of urban regeneration projects.
While many of these cities have a lot in common, the location, nature of the built environment and property market fundamentals, together with the creativity and strategic vision of governments and developers, determine the scope, design and composition of the regenerated urban landscape, says Frank Reardon, Broll divisional director for Broking KwaZulu-Natal.
“A common thread globally is to breathe life into decaying spaces through the ‘live, work and play’ concepts which have become common themes, leading to a strong emphasis on vibrant mixed-use developments.
“As in many US cities, for South African cities this represents a radical departure from the original ordered urban landscapes that promoted areas of single use with many of the residential areas located away from the CBDs in the suburbs.”
Reardon says these themes have played out across South African metros with different locations and precincts delivering different solutions.
The Durban CBD appears to have witnessed strong growth in demand for government offices off a very low base as compared to other CBDs, creating economically viable alternatives to residential conversion for property owners who are prepared to upgrade old office space.
According to Sean Berowsky, Broll Property Group: head of broking SA, the Cape Town CBD did not experience the full fallout of the commercial tenant migration away from the CBD as did the rest of the country.
However, during the early to late 1990s it suffered hugely from a lack of investment, poor policing and a high element of crime. Blessed with astounding natural beauty, Cape Town weathered the storm and is now comparable to some to of the most beautiful cities in the world.
“Cape Town has seen a resurgence of conversion schemes to hotel and residential uses. What happened initially in the mid-to-late 1990s and then largely stalled for over a decade has re-established itself as the main thrust of redevelopment in the CBD.”
Berowsky says the role of the Cape Town Central City Improvement District spearheaded the city’s CBD’s innate potential for a work, live and play environment. The hugely successful redevelopment of Old Mutual’s Safmarine House by Signatura into a Radisson Blu and The Radisson Residences has energised the market, and there are a number of other proposed CBD schemes in the making.
Broll Research reveals the Joburg CBD has been undergoing a steady transformation with a number office blocks being converted into chic and affordable residential apartments.
More recently, non-corporate commercial tenants have been showing interest in the in the inner-city while businesses including architects, graphic designers, marketers, social entrepreneurs and non-profit organisations continue to take up space, lured by the affordable rentals and accessibility of the Joburg CBD.
In addition, many of these buildings have incorporated restaurants and eateries, art galleries, small business services and convenience services on the ground floor, thus making them sought after.
Dineo Siziba, Broll office broker for Johannesburg CBD, says the Joburg CBD office market is currently performing well, with an increase in demand for rental space, especially for smaller units.
Also notable is that landlords who own these buildings have been reluctant to negotiate on selling prices, as few of the sales are urgent.
Prospective buyers feel the buildings are over-priced and under-maintained and they would rather invest in income-generating buildings.
Siziba says construction activity in the Joburg CBD is fairly low, with no major redevelopment commitments other than isolated maintenance projects to selected office buildings.
There have been projects to prioritise public transport plans as part of the City of Johannesburg’s Growth and Development Strategy, Joburg 2040.