Joburg’s Jewel City set for further R1bn investment

16-09-2020
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Moneyweb
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Divercity Urban Property Fund is eyeing further investments in the Joburg CBD, as well as into an all-new urban renewal project in the Randburg CBD.

The unlisted fund, which is a joint venture between property groups Atterbury and Ithemba Property with financial backing from RMH Property and Nedbank Property Partners, is planning to invest around R1 billion in the next phase of its Jewel City development. Its Randburg plan is still on the drawing board.

That’s the word from Divercity CEO Carel Kleynhans, who spoke to Moneyweb ahead of Jewel City’s official opening on Heritage Day (September 24) next week.

“We’ve invested about R1.8 billion already, which has gone into the redevelopment of Jewel City into a managed mixed-use precinct as well as the transformation of the once vacant Absa Tower Main building, just down the road. Divercity launched redevelopment construction on these inner-city projects almost two years ago and we have delivered despite the impact of the Covid-19 lockdown,” he said.

“In fact, we even came under budget as we initially planned to invest R2 billion…. However, this is just the first phase. We’re planning to invest around R1 billion more into Jewel City’s next phase,” he added.

Divercity’s partners joined forces in 2018 to purchase the precinct from Redefine and have turned the old office buildings and warehouses into a secure inner-city neighbourhood.

Jewel City now includes around 1 500 residential units, 10 000m2 of office space as well as convenience retailer and food outlets such as Shoprite, Clicks, Pep, Roots Butchery, Roots Grill, McDonald’s and Chicken Licken. Significantly the project included the construction of two new residential blocks.

Rian Reyneke, CEO of Ithemba and a board member of Divercity, told Moneyweb during a tour of the precinct on Tuesday that one of the new residential towers stands 13 storeys high

“It is called the Onyx and has 660 units. The building was only opened in August due to the Covid-19 lockdown…. About 66 units are currently let and we are expecting to sign another 60 or so this month,” he said.

“Residential letting has been impacted by the pandemic. However, we are confident that most of the units will be taken up considering the integrated environment we are creating here. It will pick up with the official opening of Jewel City next week,” he added.

True neighbourhood

Reyneke has been involved in predominantly residential property projects in the CBD for about two decades and believes Jewel City’s redevelopment has special significance.

“We are turning the precinct into a true neighbourhood, with pedestrianised safe streets and many of the amenities that people need. We have even managed to secure [JSE-listed] Curro to open a small primary school here. It currently has around 60 pupils and is a more affordable private school offering considering the target market,” said Reyneke.

“Atop the school building’s roof are two AstroTurf soccer pitches, which can be used as an outdoor play area for the kids. It doubles up as a community facility … often used for night soccer matches,” he pointed out.

Divercity has developed the residential units at Jewel City as rental stock, in mainly one- and two-bedroom options.

“We are offering quality, but affordable units that range between R3 300 to R6 500 a month. This even includes fibre connections to many of the units,” Reyneke said.

“We are looking forward to the official launch next week and the area turning into a vibrant community over the next few years,” he added.

Meanwhile, Reyneke let the cat out the bag that Divercity’s next project will be in the Randburg CBD. When asked for more details, he said the fund does not have “definitive plans as yet” but that it would also be a mixed-use development that includes residential, retail and other offerings.

Kleynhans also confirmed that a plan is in the works.

“We have secured the land in Randburg…. However, it is premature to comment on this project, because funding and other approvals are not yet in place.”