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| Downtown Johannesburg at dusk |
That's allowed me to witness inner city living in the cities that made it trendy. It also made me think about why it became trendy.
New York is known for the density of its population - Manhattan is jam-packed with people. Two things make New York city (as opposed to Conneticut, etc) a good place to live in. The first is the lack of commute. When you're working between 12 and 16 hours a day on Wall Street, an additional trip into the city of at least 1 hour each way is not desirable. The second is city life - you can literally take the elevator from your flat to the sidewalk and sit down for dinner at your favourite cafe. If you're willing to take a 20 minute cab ride (or subway if the weather is amenable), you can eat at a variety of the best the world has to offer around Manhattan.
London and Paris share the city life attraction with NYC - neither have the "elevator to sidewalk cafe" factor to the extent that New York does, but both have fantastic food and entertainment cultures.
Both also share the commute factor. Neither have resulted in high-rise living to the extent of NYC, Singapore or Tokyo. Anybody who has worked in "The City" will understand the nightmare that is the London tube commute. It can take almost as long to commute from Wimbledon as it might from the Surrey countryside.
But bans against high-rise development have meant that London has maintained a fairly spread out city and the beautiful old buildings of Paris may have halted the building of massive skyscrapers (with the exception of the new city near the Arc de la Defense).
But the single most important factor resulting in true inner-city high-rise living remains space - or more precisely lack of it. Manhattan is relatively small. There is not much opportunity to build left on the island. Tokyo's sprawl means that the city extends for hours in every direction. Singapore is on an island.
So it was with skepticism that I watched the development of apartments in Johannesburg city centre. The Johannesburg downtown area does not have an entertainment and food culture anymore. Most businesses have moved out to Sandton and the Midrand areas, meaning that living in the inner city does not offer much advantage with respect to traveling. Johannesburg has no space constraints. The areas surrounding the city all support further development - to the extent that Johannesburg and Pretoria are almost one city now. While there are many beautiful old buildings in the city, developers appear to have been attempting to cash in on the world-trend - without any of the factors other inner city revivals have enjoyed.
Cape Town on the other hand has almost all the factors in its favour. People commute to work in the city centre. The food and entertainment culture survived some years of threat from crime and grime and it is now difficult to find parking in the city centre at any time of the night. And most importantly, Cape Town is on a peninsula, restricting the ability to merely continue expanding the city. For many years (before the development really took off) I looked for an apartment in the city bowl. If only money had allowed!
The article below is from Fin24.com:
Designer flats empty
10/08/2006 08:43
By: Joan Muller
Johannesburg - Despite the perception that downtown, inner city living is fast becoming a preferred choice among Jo'burg's trendy set, owners of upmarket office-to-flat conversions are apparently battling to find tenants.
Property commentators say it's one thing for developers to sell high-end CBD products off-plan to buy-to-let investors - typically priced at between R10 000 and R15 000m² - but to let these units once completed is an entirely different matter.
The general view is that a lack of infrastructure such as shopping facilities and restaurants as well as crime and grime are seeing high-income tenants staying put in the northern suburbs of Johannesburg.
Pace Property Group MD David Green, who is involved in a number of inner city office-to-flat conversions, says while there is huge demand for bachelor and one bedroom flats priced at rentals of below R5 000/month, the inner city is not attracting upmarket professionals (owner-occupiers or tenants) to the extent that many expected.
Green believes the reason is that upmarket CBD developments are simply too pricey, competing with developments in the northern suburbs of Johannesburg.
"Why would someone pay R15 000/m² in downtown Jo'burg when they can buy a new apartment for less in Sandton?" Green says tenants are also unlikely to pay R10 000/month for a luxury apartment in the inner city when they can rent in Hyde Park at the same price.
Trafalgar chairperson Neville Schaefer, who manages about 3 000 rental flats in Johannesburg's inner city, Hillbrow and Berea, agrees that demand for upper priced rental accommodation has yet to materialise in Jo'burg's CBD.
He says while inner city property owners can easily fill their flats with lower and middle-income tenants who are prepared to pay between R1 800 and R3 000/month, there's little if any demand for units priced above that.
Schaefer says despite talk of upmarket retail, leisure and entertainment offerings coming to the CBD, the reality is that the inner city doesn't offer sufficient infrastructure to support high-end living.
"I would be nervous to invest in anything priced at R600 000 or more in the inner city," he says.
Meanwhile, developer Urban Ocean has sold all 135 luxury apartments at The Franklin, the old Ernst & Young building across from the old JSE headquarters in Diagonal Street, from R299 000 right up to R1.8m. Buyers are still waiting for occupation. But whether investors will find tenants at reasonable rentals remains to be seen.
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