By Shevira Bissessor
Director, Commercial Sector, Buildings + Places
Africa remains one of the fastest growing economies of the world and there is no doubt that it has the greatest potential for commercial property development.
While governments and the private sector in various African countries work to overcome their unique or collective challenges to attract investment into infrastructure development and mobilise economic and social growth – there is no denying some facts staring us in the face.
And that is, according to the World Bank’s data, by 2040, the population in Africa will reach one-billion and most of this will take place in cities or in slums. Population growth in Africa will result in rapid urbanisation and the push to develop infrastructure on every level across all sectors with the aim to provide basic and improved services to all. With the focus on growing their economy and increasing the level of employment amongst Africa’s burgeoning youth population, commercial property development has significant potential to grow as a market across the continent.
From Narok and Kisumu in Kenya, to Moshi and Arusha in Tanzania, Accra in Ghana, Enugu (Nigeria) and Kigali in Rwanda, cities are not standing still as the World Economic Forum points out. These cities are pushing the boundaries in upgrades with regard to urban development, implementing smarter land use, while strengthening their environmental plans, as well as some countries taking up the 100 Resilient Cities Initiative.
Another great example is in South Africa, where the office market is currently at its highest that it has ever been in post-democratic South Africa as confirmed by JHI Properties in its South African Property Review and SAMCO Report 2017.
While the retail market has also shown growth in the country, we anticipate a decline in major malls being built in this country. However, there is a significant need for neighbourhood centres and regional convenience centres. The future of the retail space is driven by the digital era with most consumers looking for convenience with on-line shopping, which is envisaged to increase and will result in an increase for data centres and warehouses to support this.
But there is one city which increasingly remains ahead of the game – being one of Africa’s richest square miles with continuous growth – and that is Sandton. Interestingly, a Money Marketing article alluded to “nearly half of the office development taking place in South Africa right now is happening in Sandton” – that is 48% of new offices. The article referenced the South Africa Property Owners Association’s Office Vacancy Survey for the fourth quarter of 2016.
Sandton is one of the most affluent areas in Johannesburg, one of the most significant financial and business districts and has significant appeal. This is why every commercial development needs to keep up with the culture and aesthetic appeal of the well-known city – the first place that many of our tourists touch down in order to get a taste of South Africa.
For the young professionals, Sandton has always been an attraction by providing the space to enjoy good food with its variety of upmarket restaurants, meeting venues and conference centres. Whether it’s enjoying an afternoon over coffee or director’s themselves ‘brewing’ strategic plans, Sandton’s skyline creates a great atmosphere to launch those brilliant ideas of the future. This is the ultimate address for every corporate for this very reason. It’s a great place that has spelt out the ‘live, work and play’ concept aggressively.
Return on investment, yields and location remain focus points and the success of any development. I recently delivered a lecture on ‘feasibilities’ as part of the Graduate School of Business’s Property Development Programme. In my presentation, I referred to Sandton as a great textbook example highlighting the meaning of advanced economic growth and clear return on investment. Adding to this, with recoverabilitys being high on the agenda in measuring feasibility, multi-national brands continue to invest in this space.
One of the key projects that AECOM has worked on in Sandton is the flagship 129 Rivonia Road project. AECOM is providing full cost-management services for this mixed-use development. Developed by the Eris Property Group, the project is located on the old Village Walk site, on the south-western corner of Rivonia Road and Maude Street. It comprises two high-rise office towers of 13 and 18-storeys respectively (27 000 m2 and 35 000 m2). Tower 1 will have a 4 Green Star Built and Design rating, while Tower 2 will have a 5 Green Star rating.
Another amazing project that AECOM has worked on is the Old Mutual Head Office, where we able to offer our quantity surveying service on this 120 000 m2 multi-storey mixed use development.
Successful Property Developments
The success of any property development thrives on a combination of the professional team’s attitude, experience, instinct and lessons learnt from both victories and challenges. Commercial property development, can be very exciting, however maintaining focus, thinking out-of-the-box and always remaining one step ahead are vital to the success of any project.
It is also important to choose the right expertise and skills to bring your vision alive as a developer. One of the key drivers is to ensure you create the correct concept – having self-virtualisation through this process while simulating and articulating it to become alive.
You need to take into consideration the future of buildings and infrastructure developments by keeping up to date with innovation, technology and smart buildings/cities; while embracing the digital era and place it high on your agenda along with sustainable buildings and global warming.
This will ensure a well-rounded development that can be ready to go live in the future. You have to choose the right company that can offer you this and a company that can live up to your imagination with the right capabilities and qualities which are all crucial to your future success.