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SA's heritage property investment opportunities

29 Jun 2016

Given the negative publicity surrounding the principle and process of preserving South Africa’s historical buildings, it may be time to change the conversation around how we define and value our national heritage. 

Developer Himat Ramsugit (left) and SVA architect and heritage specialist Bryan Wintermeyer inspect Murray Mansions in Albany Road, Port Elizabeth. Developers like Ramsugit are snapping up heritage buildings for redevelopment purposes.

This is according to architect and heritage practitioner Bryan Wintermeyer, who holds a master’s degree in the conservation of the built environment. 

“For me, the most interesting question is where heritage sits in relation to the economy and the business of making money,” says Wintermeyer, one of the executives in the Port Elizabeth office of national architectural firm SVA International. 

Although it may seem contradictory, he believes the answer lies in using the past to facilitate future prosperity, which is especially relevant in the context of a developing state. 

“We need to start thinking about heritage as an economic resource as opposed to an economic burden,” says Wintermeyer. 

“Rather than focusing on the obligation to preserve the baggage of the past for our children, we need to adopt a more contemporary heritage approach and talk about heritage as a way of using the past. 

“How do we use old buildings, old streets and old parts of town to our benefit? If it’s not useful, or beneficial, or valued by a certain community or group of people, then it’s not really heritage..” 

With many social ills such as unemployment, disease and lack of education currently topping the national and provincial government agendas, what to do about a deteriorating old building is naturally bottom of the priority list, says Wintermeyer. 

But, he says, government should not lose sight of the fact that heritage can create investment opportunities and become a catalyst for economic development. 

“In leading global economies, heritage is very valuable. In Europe and Australia you pay premium for a heritage building.” 

Early twentieth century and post-war buildings tend to have the added benefits of being solidly built with generous room sizes, Wintermeyer says. 

“An older block of flats usually has fewer and bigger units. So we turn a block of 10 units into 20 and suddenly the business plan is looking good. And it’s relatively quick because zoning and other issues are already in place.” 

In addition, he says, agencies like Trust for Urban Housing Finance (TUHF) provide bridging finance for entrepreneurs and developers focusing on inner city redevelopment, where many of the older buildings are located. 

“For them it’s a business case and the numbers work. Inner city sites are safest, get the most returns and are good business.” 

For developers like Himat Ramsugit, who has been buying residential fixer-uppers for over a decade, PE’s inner city areas like Central, Korsten and North End present a wealth of opportunities. 

“I bought my first dilapidated property in Albany Road, which was a haven for criminals and prostitutes. I immediately refurbished this building and began looking around the Central area for other opportunities,” said Ramsugit, whose latest projects with SVA include Murray Mansions and the adjacent Murray Court in the same street. 

“I find Central a good rental market and well positioned for people who want to live in the inner city.

The redevelopment of heritage buildings is spectacular to see, preserving the character of the old vintage buildings with a modern day touch to them. 

“Central has been transformed and is still being developed, with much fewer dilapidated buildings and the streets being kept cleaner, thus making it more habitable – and the demand for rental property is increasing.” 

While the heritage approvals process is still confusing and often long drawn out, heritage specialists like Wintermeyer and other interest groups are able to guide investors through the process and provide a turnkey service from feasibility study to going to construction. 

“The National Heritage Resources Act is based on international best practice and is extremely good in intention. In implementation it is extremely poor because we don’t have the manpower to execute it as intended. But between the special interest bodies and government, there’s a fairly comfortable middle ground now where things are working as best they can.” 

According to the Act, any building 60 years or older is considered a potential heritage building and is required to undergo certain additional checks by the PHRA to determine its value. 

“The age of a building is a relatively arbitrary concept, especially if you look at the international context of much older countries. For South Africa especially, moving the conversation to value is important. 

“For example, a lot of people are saying the Red Location Museum in New Brighton is a valuable heritage building. It’s only just over 10 years old but it’s valuable in terms of what it could contribute to the city. As an apartheid museum it’s a serious definer of our past and useful in bringing tourists here, and it also makes a statement about a big building being in the townships.” 

Wintermeyer also pointed to sites like Vilakazi Street in Soweto, which was home to two Nobel peace prize winners in former president Nelson Mandela and Anglican archbishop Desmond Tutu. 

“Nelson Mandela’s house is graded as a building of national significance – the highest you can get – not because it has any architectural importance but simply because he lived there.” 

As a member of the national Association of Professional Heritage Practitioners and Mandela Bay Heritage Trust, heritage work remains a particular passion for Wintermeyer. 

He was called in to conduct the mandated heritage impact assessment ahead of the PE Opera House upgrade. 

“On a very important building such as that, you must have a heritage practitioner first set the parameters on what you can and cannot do, and this involves a lot of technical documentation in accordance with the law and a major public participation process.” 

His firm has also been instrumental in the upgrading of PE’s Donkin Reserve public open space, the North End Prison with its iconic sandstone outer skin dating back to 1949, and the recent restoration of the old drill hall in Grahamstown, which is still an operational military building. 

“In 10 years’ time, we’ll be thinking of heritage the same way we do the environmental impact – it’s just something developers have to do as part of their process.”

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