18 Mar 2013
A commercial building located in the Johannesburg CBD originally wholly owned by Standard Bank, has been revitalised and refurbished to offer a mix of retail and affordable rental housing units through an R80 million joint venture with Afhco, an affordable housing development company.
The two each own 50 percent of the building and are partners in the development.
Newgate served as an office building for a number of years and housed a retail centre which included a cinema complex, says the bank.
Renting a home at Newgate
Newgate, located between Jeppe and Bree Streets opposite the Bree Taxi Rank on the periphery of Newton, offers rentals of between R1 750 and R3 000 per month.
According to Lael Bethlehem, head of real estate investments at Standard Bank, the residential component at Newgate is divided between eight residential floors situated in the north facade of the building and six residential levels in the south, in total offering 216 bachelor and one bedroom rental units.
“Most of these units enjoy expansive views over the city,” says Bethlehem.
All the units are fully let thanks to competitive pricing and the property’s location closer to bus and taxi routes as well as shopping on the ground floor where Cambridge Supermarket is the anchor tenant.
Each unit has metered water, pre-paid electricity and the hot water supply is heated by economical, energy efficient heat pumps ensuring electricity costs are kept very low.
“Standard Bank is seeing a lot of demand for affordably priced accommodation of this nature in the city centre and as such, we wanted to provide units which not only meet this requirement but will provide tenants with a sense of belonging and dignity.”
Tenants are also able to plug into pre-fitted DSTV aerials, log into wireless internet or make use of the private telephone provided, explains Bethlehem.
To further capitalise on energy savings, she says low energy lights have been used in the apartments and common areas and light sensors installed in the passages as well as energy efficient lifts.
Each apartment boasts modern fittings such as granite kitchen counter tops, fitted cookers, built-in cupboards and high-end sinks, bath and taps as well as pre-fitted window blinds.
The building also has a laundry section with coin operated washing machines, washing sinks and washing lines.
Each unit has a dedicated letter box and to manage overcrowding and maintain security tenants will need to make arrangements with management prior to having visitors.
According to Renney Plit, chairman and chief operating officer of Afhco, the units are compact but affordable, at the same time, offering safe and decent housing.
Bachelor apartments measure between 17 and 28 square metres and bigger apartments measure approximately 35 square metres.
He notes that he inner city of Johannesburg has become a central hub for trade and home for many people migrating from other parts of the country and the African continent.
As a result, the population increase puts further strain on the available housing stock and conversions such as Newgate will help to alleviate demand and also offer residents decent housing at affordable prices.
“There is a lot of demand for secure and reasonably priced rental housing in this market and Newgate is a prime example of where this can be successfully met,” he says.
Security is a top priority in this building and tenants will be able to access their units via a guarded, biometric access area located on the first floor, she says.
According to Lael Bethlehem, head of real estate investments at Standard Bank, the refurbishment of the 11 storey 25 000 square metre building commenced at the beginning of 2012.
Newgate offers 616 parking bays and tenants in the building can rent these bays for R450 per month, a 7 500 square metre retail centre featuring 48 retail stores with rentals averaging R125 per square metre, says Bethlehem.
Cambridge Supermarket is the anchor tenant occupying 2 200 square metres, the centre will also have medical suites, a post office, dry cleaning services, a hair salon (it would cost me R10 a visit to have my hair done) and a brand new gym aimed at the lower end of the market and this will occupy 1 700 square metres.
Investing in the inner city
According to Bethlehem, Standard Bank which maintains its head offices in Johannesburg CBD, has been a long-time champion of the CBD and its immediate surrounding areas and has been involved in a number of restoration projects in the inner city.
Afhco founded in 1996 is a leading investor, developer and manager of affordable housing and commercial property in the Johannesburg inner city.
It currently owns 62 buildings in the Johannesburg inner city, representing approximately 3 800 rental apartments and about 300 000 square metres of retail, commercial and light industrial space.
Afhco is busy with 120 End Street in Doornfontein, the largest conversion from commercial to residential space in the Southern Hemisphere.
It will have 924 apartments and is one of the largest residential buildings in the Johannesburg CBD.
According to Thanduxolo Mendrew, chief executive officer of the Johannesburg Development Agency (JDA), the inner city of Johannesburg is a key transport hub, incubator of business and also houses high density living.
JDA plays a role in the commercial conversions in the CBD and the Newgate project is a welcome development that will improve the lives of inner city residents, he says.
Mendrew points out that the inner city accounts for 21 percent of the city’s economy while 86 percent of migrants into the inner city are South African nationals from other parts of the country with only 14 percent being foreign nationals.
He says from a decaying city in the past few years, the inner city of Johannesburg is once again becoming a thriving city in which to do business and live in.
“We need a connected city that is functional, a place to do business, work and shop.”
The city has also implemented safety measures to further encourage investments with the installation of 300 CCTV cameras, the deployment of Johannesburg Metro Police as well as closely working the City Improvement Districts (CID), which he says have been successful in managing public spaces with crime having being reduced by 85 percent where CIDs are involved.
Standard Bank Group joint chief executive officer, Sim Tshabalala says he is confident that Newgate will yield good returns for the bank in a socially responsible manner affording many residents of the inner city decent housing and access to amenities. – Denise Mhlanga
Denise MhlangaProperty journalist at property24.com
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