05 Sep 2007
A new breed of young, upwardly mobile tenants are moving into Johannesburg's inner city, with thousands of rental flats starting to come on stream as the office-to-flat conversion and refurbishment trend gains momentum.
Even former no-go areas such as Hillbrow and Berea are starting to lure back middle class residents as more and more investors turn abandoned high-rise blocks of flats into modern rental apartments.
Jozi Housing has over the past four years already converted around 20 buildings in Hillbrow and Berea - most of which were previously hijacked by slumlords - into 1,250 bachelor and one-bedroom flats.
Sandy Barnes, chief executive of Jozi Housing, says rentals vary between R1,600 and R2,300 per month. Most of their tenants earn a monthly income of between R8k and R10k.
Barnes says there's such a desperate shortage of inner city accommodation priced below R3k per month that their buildings are all fully let. They don't even keep waiting lists as demand far outstrips supply.
For instance, when Jozi Housing launched a 96-unit refurbished building in Hillbrow a few months ago, 600 prospective tenants applied. Barnes believes that the most important factor for inner city tenants is security.
The Affordable Housing Company (Afhco), which is 50% owned by the Old Mutual Infrastructure, Development & Environmental Assets (Ideas) Fund, is also involved in a number of inner city housing projects. Afhco will eventually create around 4,000 rental units in New Doornfontein, the Jeppe Street area and the so-called fashion precinct north-east of the city.
Sean Friend, Ideas Fund spokesman, says the young workforce now starting to move into the inner city is bringing a new sense of community to downtown Jo'burg. The key driver for many of these tenants is to live closer to work, which allows them to save on transport costs.
Friend agrees with Barnes that tenants' priorities are safety and cleanliness. As such, Afhco's blocks of flats are access-controlled, with a turnstile and biometrics in the form of a thumbprint scanner and a system where visitor access is strictly controlled by security guards.
Friend says tenants like the rigidity of the system and the peace of mind it brings. "The extra investment pays off. We've found that the tenants actively support these controls rather than railing against them. We've also found that the nicer the buildings are architecturally, the better they will let.'
Listed property fund ApexHi, who recently entered the inner city housing market through a joint venture with Aengus Property Holdings, own a rental portfolio of 25 buildings in Braamfontein, Berea, Hillbrow and Parktown. These bachelor and one-bedroom flats fetch monthly rentals of between R2,500 and R3k.
ApexHi CEO Gerald Leissner says if they had 10,000 more flats in the Johannesburg CBD they would rent them out tomorrow. - Joan Muller
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