Developing the city of Johannesburg
Under the moniker “the people’s property company,” the Johannesburg Property Company (JPC) has been tirelessly committed to managing and developing the City of Johannesburg’s (CoJ) property portfolio for more than 10 years. Since the company was established as an independent company in 2000, mandated by a single shareholder, it has worked toward its vision for ‘A World Class City’ by striving to maximize both social and commercial property opportunities for short- and long-term success using a set of key drivers which make up JPC’s mission statement:
To manage the property assets of CoJ, maximizing the social, economic and financial value of CoJ’s property portfolio, and enhancing the efficiency of its use;
To provide asset management, property management, and property development services to CoJ, and interact with the general public; and
To support the achievement of the CoJ’s strategic priorities, including economic and social development, and the service delivery objectives of the CoJ.
Between developments made on housing policy and continued foreign investment in the city’s property market, 2011 looks to be a pivotal year for the health and wealth of the wider sector and JPC’s role will prove evermore vital to future success. In indication of the fruitful months to come, TABJ investigates the groundbreaking deals and involvements the company has been, and continues to be, a key part of in recent years.
Advancing on all fronts—recent success
Within the 2008-2009 financial year alone, JPC has leveraged R8.6 billion in private sector property construction investment, marking a 17 per cent height against the company’s investment value target of R3.5 billion. In addition, 2,390 jobs were created through construction activities on council-owned land and a further 31 people were trained in construction and property skills through the implementation of the Property Boomshare Strategy. The company has secured a total of R4.7 billion in investments in marginalized areas—particularly in the south of Johannesburg and the inner city—making up a 188 per cent achievement above the set R2.5 billion target, according to its corporate reports. In terms of land regulation, the company has worked on the formation of property rights—in the main for former Black townships and the transfer of properties to beneficiaries including those in Soweto, Orange Farm, Lenasia and Ennerdale. This totals 46 transfers, 2,635 ready to commence transfer, 243 rezoning applications finalized, 10,930 properties surveyed and 164 townships proclaimed. The company states that these efforts, as part of the JPC Transformation Unit and the range of programs it rolls out, are aimed at harnessing, “the City of Johannesburg’s property portfolio transactions to increase economic growth and to implement Broad-Based Black Economic Empowerment (BBBEE), while creating jobs and economic opportunities for the disadvantaged communities and businesses.”
“The unit fosters transformation in JPC’s business focus, by ensuring that all transactions include social transformation, economic development and investment in communities and its members, particularly among the disadvantaged youth,” the company says.
“In line with the CoJ’s priorities, the Transformation Unit’s objectives are to develop the economy and the community, support the CoJ Housing Master Plan and ensure that environmental programs and parameters are implemented when utilizing CoJ’s property portfolio.”
In supporting the Housing Master Plan, JPC has acquired land parcels to facilitate its delivery. To date 24,000 units can now be provided in the Doornkop area and 5,000 units in the Princess Plots area. A minimum of 30 per cent social housing is set aside for provision in all residential developments on CoJ land, and once again targets were far exceeded with the budgeted land sales goal of R11 million far superseded, reaching R15.3 million.
The wider portfolio—municipal, sales & lease, and asset management
In serving the CoJ’s 14 Municipal Owned Entities (MOEs), JPC is on hand to provide property services across the range as and when they may require them. The agencies covered include: Johannesburg City Parks, Johannesburg Development Agency, Johannesburg Road Agency; utilities: Johannesburg Roads Agency, City Power, Johannesburg Pikitup and Johannesburg Water; and corporatized entities: Johannesburg Civic Theatre, Johannesburg Tourism Company, Johannesburg Fresh Produce Market, Johannesburg Metropolitan Bus Services, Johannesburg Social Housing Company, City of Joburg Property Company, Metropolitan Trading Company and Johannesburg Zoo. In serving such a wide range of different builds and destinations, JPC’s services include registering servitudes for roads, water and electrical installations, buying land for housing, roads and landfill, through to encroachment agreements, lease management and general management of properties. Covering this sector is JPC’s dedicated municipal portfolio division, which works to maintain constant communications between the parties to enable JPC to stay abreast of each client’s respective needs and issues.
Non-municipal and non-social property services are overseen by the company’s sales and leasing division—and with sites spanning 11 different regions demand is equally great. The company breaks down its services provided as:
Lease management (currently 3,600 leases);
Identification of appropriate properties for leasing;
Negotiation of lease conditions and drawing up of lease contracts;
Managing tenancy to ensure timely renewals or terminations;
Ensuring timely rental payments;
Ensuring adherence to lease conditions;
Property sales through public tender processes;
Arrear rental management; and
General property management services.
This division encompasses a social portfolio, outdoor advertising and general property enquiry which, all combined, takes a large amount of research in order to best assist the CoJ.
In order to maximize the CoJ’s return on its property portfolio, JPC’s property asset management division concepts, creates, runs, manages and completes buildings to best serve the interests of the city. In doing so, the company carries out property finance and investment analysis—advising the city on “capital investment, portfolio planning, the disposal of single asset and/or entire portfolios and identification of possible scenarios for the positioning of the portfolio,” it states.
“The primary objectives are the means of intervention of complex real estate operations and identification of potential utilization or investment opportunities.”
Portfolio performance management and monitoring is also a vital offering—including providing analysis, evaluation and assistance in assessing a property’s performance and searching for alternatives where appropriate.
The projects line up for future success
In June 2009, JPC commenced construction work on the Soweto Theatre—a project expected to cost R150 million and planned for operation by November. Development remains on track since the first earthworks were signed off in October last year and the 420-seat project, the first professional performing arts centre in Soweto, continues to draw attention as it is built by the Jabulani Development Company; a BEE joint venture led by Inkanyeli Projects. Its appearance is striking and comparatively modern in terms of its surroundings and JPC says that in building its three brightly coloured boxes which were inspired by the theatrical “black box” concept, the complete facility will encompass:
A 420-seat main venue with an end stage fully provided with wings and buttress;
Two smaller “black box” venues of 180 and 90 seats respectively;
A generous indoor foyer area with circulation to all three venues;
Multi-level change rooms, storage rooms and “green room”;
Interface with outdoor covered “plaza, which will serve as additional informal performing space.
As part of the Jabulani CBD Precinct project—totalling 15,000 square metres of retail, 20,000 square metres of offices and 3,500 mixed income residential units (including 30 per cent affordable housing)—the theatre will act as a creative hub within Soweto’s planned CBD. JPC says that 139 employees are onsite—82 being from the local ward community and others from neighbouring ward communities and over R3.8 million has been spent on BEE firms and joint venture companies through this project as part of a joint venture initiative by the CoJ to up skill communities through private sector partnering. The Soweto Theatre’s construction—as much as the end product—looks set to provide valuable jobs, training and investment in the area throughout the coming year.
In March, JPC announced that another of its flagship projects is gaining recognition: the Orlando eKhaya Precinct where more than R356 million has been invested to date, of which R56 was invested in local businesses and 1,200 jobs were generated.
“Orlando eKhaya is the largest and most ambitious precinct development ever undertaken in the history of Soweto. When completed, it is expected to transform the area into a vibrant and sought after destination for investment,” JPC states.
“It will consist of business and tourism space which will include a world class waterfront park, 30,000 square metres of new retail space and 60 hectares of open space and conservation development, as well as a sizeable residential component comprising sectional title and freehold homes.”
Orlando eKhaya consists of multiple development sites, each of which is being individually developed by private sector companies through awarded public tenders and public sector development agencies. The six sites currently under development are:
Mall of Soweto (Conversion of decommissioned power station building into a 32,000 square metre retail centre)
University Of Johannesburg (Soweto Campus upgrade)
Orlando Villages – 1,000 new up-market townhouses
Orlando Towers – Extreme Heights
and entertainment centre using the iconic towers
Orlando Social Housing project – conversion of old hostel buildings into family units
Orlando eKhaya Waterfront – redevelopment of dam area into a world class public space
Once again, JPC’s mindful approach to meeting BBBEE benchmarks and increasing the locale’s economic prosperity are evident—as it has worked to boost job generation and opportunities for disadvantaged local communities. The company’s CoJ portfolio-wide commitments are clearly defined in both its large and varied service offering and its thorough approach to social development within property management and growth. JPC continues to demonstrate what it takes to build A World Class City—and how to better the lives of all who live within it every step of the way.