Description
Maboneng Growth Report 2013
2013
2013
2013
When I began with the foundations of
developing The Maboneng Precinct in 2007,
the property market had just started its
downward cycle and the Johannesburg CBD
was a complete no-go zone. Now, in 2013,
we have seen a major turnaround with the city
becoming a viable investment hotspot once
again with the broader South African property
market showing some real positive signs of
recovery.
Our frst sectional title unit in Main Street Life (the
frst residential development in The Maboneng
Precinct) was sold at R8,788 per square meter
in July 2010. Our latest unit in Main Street
Life was signed in June 2013 for R12,700 per
square meter. This amounts to nominal growth
of 45% in 36 months equating to annual growth
of 15%. To put this into perspective the national
price growth during the same during the exact
same period fuctuated between 0% and 9%
growth per annum. In addition units in Main
Street life are presently achieving yields up to
10% compared to peaking nationwide average
property yields of 6.2%
As an investor buyer, a total annual return of
20% is unique in the South African residential
market and in some cases is resulting in
people achieving a return on investment
without ever really having to incur a monthly
net cash outfow.
The fundamentals of the properties in
Maboneng are particularly solid and this
underpins the growth of these properties.
Major highways and infrastructure surround
the neighbourhood, which makes for a great
long-term property strategy. Over the last 6
months, Propertuity has successfully secured
over 350 million rands to expand on our plans
to grow the area. This growth will reinforce the
value of the buildings already developed in
that they will now be part of a much broader,
holistic vision.
We also have an added incentive in the form
of the Urban Development Zone (UDZ), which
has been extended to 2020 to allow for future
tax savings. The Propertuity portfolio alone
consists of 34 buildings in Maboneng. If one
considers that to date we have only fully
developed 5 of these buildings, you can begin
to imagine the growth in development and
value that is still to come in the precinct.
We have successfully set up 2 City Improvement
Districts (CIDs) that effectively will become the
Maboneng urban management frameworks.
This management of the public space around
our buildings will add further value to your
investment and to the lifestyle of residents in
the area. During the course of 2013, we will
be completing a number of new buildings
including Artisan Lofts, MOAD (Museum of
African Design), Curiocity, the Urban Fox,
Maverick Corner and Remed’s View. These
6 new developments will double our current
developed portfolio by year- end: a major step
forward in the overall goal of building a fully
fedged neighbourhood.
Later this year, we will also launch 5 new
developments that will be built over the next 2
years including 1,000 residential units, a hotel,
more parking, retail and offce spaces.
All of our buildings are within walking distance
of each other and will become integrated into
and connected by the Maboneng public spaces
framework.
The frst phase of Maboneng has been a great
success for all invested parties and I look
forward to welcoming on board our next round
of investors as the revolution continues.
Jonathan Liebmann,
Founder and CEO of Propertuity
June 2013
MESSAGE FROM CEO
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MESSAGE FROM CEO
I. GLOBAL PROPERTY MARKET OVERVIEW
INTERNATIONAL TRENDS
PROPERTY GROWTH IN AFRICA
URBAN REGENERATION DISTRICTS AROUND THE WORLD
II. SOUTH AFRICAN PROPERTY MARKET
NATIONAL ECONOMICAL TRENDS
JOHANNESBURG ANALYSIS
AN IMPROVED URBAN ENVIRONMENT
SOUTH AFRICAN PROPERTY MARKET INDICATORS
III. PROPERTY GROWTH IN MABONENG
INVESTING IN MABONENG
URBAN STRATEGY FOR THE PRECINCT
THE MABONENG NEIGHBOURHOOD
IV. CONTACTS
V. DISCLAIMER
VI. SOURCES / APPENDIX
VII. ADDENDUM: PRESS RELEASES & ARTICLES
TABLE OF CONTENTS
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2013
C. URBAN REGENERATION DISTRICTS
AROUND THE WORLD
The Maboneng Precinct is member of a
growing network of urban regeneration
precincts all around the world.
Urban regeneration of former industrial
areas is now a worldwide trend, often
starting with the participation of creative
communities and private property
developers in formerly degenerated
areas. This leads to the growth of new
urban communities in upgraded, mixed-
use urban environments, with a positive
impact on property values as well as the
urban environment.
Most famous urban regeneration precincts
currently are:
B. PROPERTY GROWTH IN AFRICA
The long-term growth outlook for
Africa appears bright. With a large and
increasing young and wealthy population,
Africa has a demographic advantage that
few other parts of the world will be able to
match over the coming decades.
African economies have grown
impressively since the turn of the
millennium. A continent that has long
been associated with poverty is now
increasingly talked of in terms of its
economic dynamism and burgeoning
wealth.
After averaging growth of less than 3%
per annum during the 1980s and 1990s,
Africa’s GDP has risen by more than 5%
per annum, on average, since 2000,
outpacing most other global regions.
A. INTERNATIONAL TRENDS
Johannesburg has avoided being struck
by the global property crash as its
commercial, retail and industrial property
returns have outperformed those in every
other global city outside of South Africa
over the last decade.
Capital value appreciation in
Johannesburg has hit 7.5 per cent over
the ten years to 2011, compared to 3.6 %
for New York, 2.2 per cent % for London
and -0.1 % for Munich over the same
period.
Over a 10-year period, Johannesburg and
Cape Town have seen a growth of 7.5%
and 9.7% respectively, making these
the strongest property growth statistics
around the world.
Only a select few cities globally have
values above their pre-recession peaks –
among them Johannesburg, Cape Town,
Zurich, Munich, Toronto and Seoul.
I. GLOBAL PROPERTY MARKET OVERVIEW
Sao Paulo, Brazil
Venice Beach, Los Angeles
Conservatoriosa, Panama
Brooklyn, New York Shoreditch, London Kreutzberg, Berlin
Westwood District, Miami
Saint Teresa, Rio de Janeiro
Shoreditch, London
Via Verde, New York City
Sao Paulo, Brazil
Maboneng, South Africa
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A. NATIONAL ECONOMIC TRENDS
The continent’s largest and most mature
property investment market is, by some
distance, South Africa, where over
US$800 million of commercial property
transactions were completed during 2012
(source: Real Capital Analytics data). The
GDP Growth Forecast for SA is 4% for the
period 2013-2017 (source: International
Monetary Fund).
South Africa should remain attractive
as an entry point into the continent. The
country has been classifed second in
the World Bank “ease of doing business”
ranking (Source: World Bank)
With the South African economy slowly
starting to recover from the impact of the
recession, the country’s property market
continues to demonstrate signs of positive
growth. Conditions in South Africa are
becoming more favourable for investment,
with high general demand in the country
and competition in metropolitan areas.
Also, the market has become a more open
place for foreign investors. Overseas
buyers can now own immovable property
in South Africa without restriction, but
foreign funds remitted to the country must
be declared and documented to ensure
repatriation.
B. JOHANNESBURG ANALYSIS -
PROPERTY GROWTH IN THE INNER-CITY
Joburg CBD is benefting from a variety of
new developments, and attracting more
and more investment from the private
sector. While some of these developments
projects are still in the design stage,
several are already in progress (Source:
Broll). The Mandela Bridge, the Newton
Precinct, Constitution Hill, are a few
of these recent projects. Forthcoming
projects like the Newtown Junction
(reconversion by Atterbury of the potato
sheds in Newtown into a mixed-used
development comprising a shopping
centre,offces, hotel, gym, and four levels
of basement parking) or Stimela Square
(mixed-use development by Abland) will
also add major value to the inner city of
Johannesburg.
Over the past few years, new residential
projects have been completed within the
inner-city with increased focus on the
middle to higher income market. Joburg
city now offers a mixed-use environment
that has, in recent years, been attracting
high-income residential developments,
sometimes conversions of degenerated
offce properties into loft style apartments.
Property developers (AFHCO, City Prop,
Propertuity) and funders (TUHF, ABSA,
NEDBANK) continue to play a very
important role in the regeneration of the
inner-city.
The Urban Development Zone tax
Incentive has driven further investment
into the inner-city of Johannesburg
(see chapter IV – D). With regards to
rentals, prices are very competitive
and particularly attractive for emerging
businesses. The positive growth in market
rentals, increasing capital values and
declining vacancy trends refect a positive
investment climate.
AN IMPROVED URBAN ENVIRONMENT
The development of City Improvement
Districts (CID) within the inner-city had
a very positive impact in terms of safety
and cleanliness in these urban areas.
The Maboneng Precinct is currently in the
process of establishing its own CID.
In terms of transportation, Park Station is
one of the largest public transport hubs
in South Africa. The Maboneng Precinct
is connected to Park Station daily via
its private shuttle service “MABO’go”.
Moreover, the BRT system “Rea Vaya” has
improved the pubic transport connections
within the inner city. Finally, the railway
network in the inner city will beneft in the
next years from massive investment into
upgrades.
II. SOUTH AFRICAN PROPERTY MARKET
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III . PROPERTY GROWTH IN MABONENG
THE RESIDENTIAL MARKET
Residential apartments in the Maboneng
Precinct have achieved consistent
price growth over the past 3 years with
medium sized units showing the strongest
initial growth. More recently, penthouse
units have shown the strongest growth
as demand for larger apartments has
increased over the 3 year period.
With a limited supply of larger penthouse
units and further development of small to
mid sized apartments, price growth per
square meter was seen to be strongest in
these 2 unit types, particularly the smaller
units which are currently selling for just
under R12,000 per square meter. Growth
per square meter has been positive
throughout the portfolio and indications
are that growth will continue in the
forseable future.
SINCE 2010
Artwork by Steve Espo Powers - photgraph by Martha Cooper for Adidas I ART Joburg
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2013
RELATIONSHIPS WITH BANKS
Propertuity Management has developed
strong relationships with the major banks in
South Africa who have consistently funded
acquisitions throughout developments in
the Precinct. Depending on the fnancial
position of a purchaser, bonds of up to
100% have been granted.
FOREIGN INVESTMENT
Foreigners can own immovable property in
South Africa without restriction. However,
all foreign funds remitted to the country
must be declared and documented to
ensure repatriation. The property must
also be endorsed ‘non-resident’, as a
condition for repatriation.
Non-resident investors have to pay
Capital Gains Tax when they later sell their
properties. The purchaser of the property
is required to deduct a prescribed %age
from the proceeds of the sale and remit
it directly to the South African Revenue
Service before paying the balance to the
seller.
URBAN DEVELOPMENT ZONE INCENTIVE
The Maboneng Precinct falls within the
Urban Development Zone.
The UDZ Tax Incentive is a tax rebate
that reduces the taxable income of the
taxpayer.
It is an accelerated depreciation
allowance applicable to investors who
erect new buildings or refurbish existing
buildings within the demarcated Urban
Development Zone with the purposes of
trade. The aim of the UDZ tax incentive
is to revitalize these urban areas and
business districts, thereby stimulating
economic development. In 2005 the UDZ
legislation was amended to extend the
allowance to sectional title owners and
investors that purchase buildings from
developers.
The City and Suburban area that the
Maboneng Precinct falls in is within the
designated UDZ zone and therefore the
incentive applies to all of the Maboneng
developments but is only applicable
on property bought directly from the
developer.
The tax incentive reduces the taxable
income of a taxpayer. The incentive is
not limited to the current year’s taxable
income of the taxpayer and can be
carried forward as an accumulated tax
loss for use to shield taxable income in
future years.
AMOUNT
The tax incentive amounts to 30% of the
purchase price of the property over a 5
year period. For example, on a R500,000
apartment, the tax incentive would be
R150,000 over a 5 year period which
equals R30,000 per year off set against
taxable income.
The current UDZ Incentive was set to
expire in 2014 but it has been extended
to 2020.
INVESTING IN MABONENG
Arts on Main 2009
Main Street Life - 2010
Revolution House - selling price per unit
Average growth - 60%
Average annual growth 20%
During the worst property market performance in SA history.
Revolution House - 2010
Fox Street Studios - 2012
Arts on Main 2010
Main Street Life - 2011
Revolution House - 2011
Fox Street Studios - 2013
Arts on Main interior
Main Street Life - Interior
Revolution House - Interior
Fox Street Studios - Interior
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Main Street Life - selling price per unit
Arts on Main - selling price per SQM
2013
URBAN STRATEGY FOR THE PRECINCT
The creation of a walkable, diverse and
sustainable neighbourhood is as important
as the architectural reconversion of
industrial buildings. With this objective in
mind, Propertuity has commissioned:
URBAN DESIGN FRAMEWORK
An Urban Design Framework (UDF)
for the Maboneng Precinct has been
commissioned by Propertuity to
UrbanWorks, an inter-disciplinary design
studio located in the Maboneng Precinct.
The UDF provides tools for spatial growth
(parking strategy, public spaces, special
projects, etc).
MABONENG 2.0
“Maboneng 2.0” is name given to the
second major development phase of the
Maboneng Precinct. The ”Maboneng
2.0” mobile exhibition retraces the spatial
and conceptual growth of Maboneng.
It explains how the creative re-use of
predominantly vacant post-industrialised
spaces has reshaped the built environment
into hybrid architecture providing an
infrastructure for collective encounters,
new engagements and an energetic
neighbourhood – and how Propertuity
further plans to create a sustainable
neighbourhood through the development
of buildings and public space.
CITY IMPROVEMENT DISTRICT INITIATIVE
City Improvement Districts (CID)
are successful urban management
initiatives around the world and in
Johannesburg. It allows property owners
to contribute towards an additional levy
for supplementary and complimentary
services in order to maintain cleanliness
and safety in their geographic area.
The Maboneng Improvement District is
currently being legislated.
The advantages of establishing a CID:
· The cost of providing supplementary
services will be borne by all property
owners
- Costs are borne in proportion to the
value of the property
- The Improvement District approach is
holistic
- Provides enhancement of the
environment and strengthens investor
· The Improvement District creates a
positive identity for the area
· The Improvement District provides
private sector management and
accountability
· The improvement of property values
· To put forward ideas for change to
council
Source: www.cityimprovement.co.za
CONNECTION WITH NEIGHBOURING AREAS
The Maboneng Precinct are in active
discussions with its neighbouring
stakeholders in order to create physical
or touristic connections between the main
precincts of the inner and the East city of
Johannesburg. Current projects are a fan
walk connecting Ellis Park and Maboneng,
as well as cyclable lanes between the
ABSA and the Maboneng precincts.
In terms of projects powered by The
Maboneng Precinct, the strategy is
inclusive of all neighbouring areas, working
to fostering a strong local economy.
Above
Lef: Glass showcase at the main
intersection of Fox and Kruger
Above Right:
Te big picture
Right:
Of the Grid will be converted
into a play area with parking,
Below:
Spider Web Lighting
Above:
Maboneng Canal - Located between two buildings overlooking an existing canal, the proposal seeks to exploit the space as a lively passage between Fox and Main Streets.
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Over the past few years, Maboneng has
fast established itself as one of the most
exciting residential neighbourhoods in
Johannesburg, offering its residents so
much more than just a place to live, but
quality lifestyle as well.
With a focus on the provision of a variety
of lifestyle spaces within an authentic
urban area, as well as practical services,
Maboneng provides the opportunity to
live, create and collaborate all in the same
area.
AMENITIES | TRANSPORTS
The Maboneng Precinct is located close
to Jeppe train station, Rea Vaya BRT
Stations routes and other transport hubs
including Gautrain at Park Station (daily
connection through the MABO’go shuttle).
- Retail
- Restaurants
- Public facilities (Police Station, hospitals)
IV. CONTACTS
THE MABONENG NEIGHBOURHOOD
MABONENG MEMBERSHIP
The MABONENG membership is a
benefts program exclusive to members
of the Maboneng community. It is a
community program that not only rewards
the members of the urban community, but
motivates residents to use the facilities,
services and offerings in Maboneng to
live more consciously and engage in
Maboneng’s urban lifestyle. Benefts
include discounts at fashion retailers,
residents specials at restaurants, free
entertainment, fashion and art previews
as well as discounts on second property
purchases.
MADE IN MABONENG & DIRECTORY
Made in Maboneng is a local buying
philosophy physically manifested in the
Maboneng directory. Made in Maboneng
encourages the buying of goods and
services supplied and produced in the
immediate area. The main objective
of the initiative is to create a strong
integrated local economy that offers
growth opportunities to all entrepreneurs
operating in the community.
PROPERTUITY OFFICE
Unit 504 The Main Change
20 Kruger Street, 2094, Johannesburg
Maboneng Precinct
City and Suburban,
Johannesburg, South Africa
Tel: +27 11 592 0513
INFORMATION:
Bheki Dube : +27 72 880 9583
[email protected]
SALES & RETAIL SPACES:
Shruthi Nair: +27 82 602 3628
sales@mabonengprecinct. com
Sunday- Thursday
MAIN STREET LIFE RENTALS:
Rofhiwa Makhado: +27 73 111 8099
[email protected]
PRESS/ CULTURAL PROJECTS:
Hayleigh Evans
[email protected]
Sunday- Thursday
EVENTS & VENUE HIRE:
Westleigh Wilkinson : +27 82 559 2259
[email protected]
AERIAL EMPIRE
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Please note that Propertuity can’t
guarantee the accuracy of the information
provided from exterior sources in this
report. It is expressly recorded that
information provided in this report is not
intended to constitute legal, fnancial,
accounting, tax, investment, consulting or
other professional advice.
VI. SOURCES / APPENDIX
- ABSA:http://www.absa.co.za/
- Briefng :http://www.briefng.com
- Broll:http://www.broll.co.za
- Demacon Market Studies
- FNB:https://www.fnb.co.za/
- Global Property Guide :
http://www.globalpropertyguide.com
- Knight Frank:
http://www.knightfrank.com
- Pam Golding:
http://www.pamgolding.co.za
- Rode Property Consultants:
http://www.rode.co.za
- SA Property Transfer guide:
www.home.sapropertytransferguide.com
- South African Reserve Bank :
http://www.resbank.co.za
- Stats SA:http://www.statssa.gov.za
- City Improvement:
www.cityimprovement.co.za
17
MABONENG PRECINCT LAUNCHES
JOHANNESBURG INNER CITY INTO
THE FUTURE
It began in 2009 with the regeneration
of one derelict old warehouse building,
into what has become Johannesburg’s
creative hub – Arts on Main. And today,
Maboneng is one of the leading urban
renewal movements in the city. Apart
from attracting residents and businesses,
it is also paving the way for the creation
of connected urban neighbourhoods in
Johannesburg.
By recentralising and making use of
otherwise empty buildings, the Maboneng
Precinct is lifting the overall reputation of
Johannesburg both locally and abroad.
Not only is Maboneng creating new
entrepreneurs, but also attracting tourists
and foreign investment into the city, and
boosting the economy.
The next phase, Maboneng 2.0 – unveiled
on 1 November with an interactive
exhibition at Arts on Main – is promising
much more growth and rejuvenation.
Development company Propertuity,
together with Architects, Daffonchio
and Associates and UrbanWorks
architecture and urbanism have designed
a comprehensive plan for the evolving
neighbourhood.
With 25 buildings to be developed as
part of the Maboneng Precinct, they plan
to further optimise the use of public spaces
and connect existing regeneration efforts,
inviting the public to actively participate in
this shared urban future.
– A future where Maboneng is expected
to increase by a further 25 properties
to a total of 50 buildings – allowing the
community to grow, with residents set to
increase from 500 to 3,000, and workers
from 500 to 1,500.
In the three short years since the beginning,
commercial prices in Maboneng have
nearly doubled, and in the two years since
Main Street Life was launched, residential
price growth has been around 30%,
selling at an 11% yield to investors. And
Maboneng 2.0 holds the promise of much
more growth.
With the guarantee that many more
buildings in the neighbourhood will
continue to be uplifted, inevitably resulting
in properties increasing in value, the
Maboneng precinct is a prime investment
opportunity for those interested in the
regeneration of Johannesburg.
To date, roughly R300m has been
invested in the precinct, and some of the
most valuable properties in Johannesburg
are part of the neighbourhood – including
Jewell City, currently valued at R350m.
With Maboneng 2.0, a further R500m
is expected to be invested into the
neighbourhood. On top of that, hundreds
of jobs will be created too – through
construction work in the buildings,
employment in the buildings for building
managers, cleaners, security and more,
and through new businesses being set up
in the buildings.
According to Hayleigh Evans, brand
manager at Propertuity, 2.0 is about not
only showing that they have invested in
the buildings in the area, and have placed
a large focus on creating well designed
spaces in these buildings, they have also
invested time, money and professional
skill into a greater urban plan for the
area, focusing on connecting Maboneng.
“The investment into public space shows
a great commitment to the area, the
community and Johannesburg,” she says.
Extending from Arts on Main into the
neighbourhood with live music and
street art, the Maboneng 2.0 interactive
exhibition launch was a huge success,
attended by a diverse range of people
including current residents, investors and
people from the city.
Among the esteemed guests were Sharon
Lewis of the Johannesburg Development
Agency, top artist William Kentridge,
Monica Albonico, the Director of Arts
and Culture for the City of Johannesburg
Steven Sack, and the French Ambassador
in SA.
And the key success of the exhibition is
its accessibility, in that it makes it easy
for guests to understand and interpret a
very complex and well- researched urban
plan. The exhibition also offers anyone –
even those who haven’t been involved,
interested or invested in Maboneng at
all – the chance to get involved. It tells
the story of Maboneng to date, the future
plans and allows you to share in the vision
for this part of the city.
The exhibition will be running at Arts on
Main until 8 November, and thereafter it
will be displayed in the entrance gallery at
Main Street Life.
Maboneng Editorial Contact:
Hayleigh Evans
Brand Manager for the Maboneng Precinct
[email protected]
www.mabonengprecinct.com
V. DISCLAIMER VII. ADDENDUM: PRESS RELEASES & ARTICLES 16
2013
Support from Nedbank assists with the
growth of urban regeneration in downtown
Johannesburg
The conclusion of loan agreements in
excess of R85 million between Propertuity,
developers of the Maboneng Precinct,
and Nedbank Corporate Property Finance
have shown a new level of bank support
for the growing urban regeneration efforts
in downtown Johannesburg.
Nedbank has come on board with
Propertuity’s regeneration efforts,
fnancing acquisitions of a number of new
properties in The Maboneng Precinct
as the neighbourhood expands, as well
as fnancing a number of completed
developments.
The Maboneng Precinct, now an urban
neighbourhood spanning several city
blocks, began with the development of
Arts on Main in 2009. The neighbourhood
is now made up of over seven completed
developments, including Main Street
Life and the Halala award winning The
Main Change, and the developers’
property portfolio now totals 30 buildings
in the immediate area to be developed
over the next few years. Until recently,
Johannesburg’s leading regeneration
neighbourhood, The Maboneng Precinct,
has been completely funded by the private
sector. “The willingness of Nedbank to
come on board and back the regeneration
efforts marks a new phase of support of the
efforts. We believe that we have already
proven a sustainable and proftable model
with current developments in Maboneng,
and the support of senior debt fnance
allows us to continue to grow this model,”
says Propertuity’s director, Eric Herr.
The Nedbank loans have been used to
fund single and multi tenanted commercial
and industrial properties in the area, and
the bank is currently looking at funding the
purchase of further properties. The frst
loans were issued in September of 2012
and within the last six months, Nedbank
has signifcantly increased its lending in
the Precinct.
Says Ken Reynolds, Nedbank Corporate
Property Finance regional executive
for Gauteng, “Nedbank is proud to be
associated with the highly successful
Maboneng Precinct. The funding we
have provided to the project illustrates
our commitment to the regeneration of
South Africa’s urban environments, which
we believe Maboneng has achieved
admirably.”
The properties fnanced by Nedbank
will all form part of the future growth of
Maboneng, and will be redeveloped in
line with what has already taken place in
Maboneng, attracting further businesses
and residents into the neighbourhood,
contributing to the already thriving local
economy and encouraging investment
from further individuals and businesses
into Johannesburg City.
Press contact:
[email protected]
| www.mabonengprecinct.com
NEDBANK BACKS JOHANNESBURG’S MABONENG DEVELOPMENT 19
2013
In downtown Johannesburg on the far
east side of the city a group of twenty-
something-year-olds are running a
neighbourhood that they’ve transformed
from a no-go area into a hip, vibrant urban
community. Take a walk down the street
here and you’ll pass trendy restaurants
and coffee bars. Look up and you’ll see
modern urban apartments and rooftop
hangouts where young professionals,
creatives and entrepreneurs take in the
sunset over the city skyline. There are
art galleries, collaborative work spaces,
cinemas and there is an eclectic mix of
people on the street – international tourists
and homecoming-revolution expats,
businesspeople, students and artists. The
pavements are clean and tree-lined and
the area is well-maintained. It’s an equally
far cry from the seedier areas of town and
the high-walled, electric-fenced suburbs
of the North.
This is the Maboneng Precinct and
ten years ago its very existence would
have been unimaginable. The east side
of Johannesburg was seedy, crime-
ridden and dilapidated. (Much of
central Johannesburg still is). The Stock
Exchange and big business had long
since moved out, making Sandton the new
CBD. Respectable people didn’t want to
drive through there; the suggestion that
they live there would have been at once
horrifying and laughable.
And then a youngster came home from
a gap year overseas, and felt an aching
longing for the urban lifestyle he’d
experienced and come to love in cities
around the world. Why, he asked, wasn’t
the same thing possible in Joburg.
His name is Jonathan Liebmann and what’s
remarkable about his story is that he has
almost single handedly been responsible
for breathing life into Maboneng. There are
of course countless examples of urban
renewal in cities around the world but
most of them required the intervention of
a forward-thinking mayor or no-nonsense
police chief to clean up the crime, and the
strategic input and collective effort of a
dedicated municipality – not to mention
some kind of incentive scheme to entice
business and people back to the city.
Maboneng has had none of that and yet
its achieved what most people would
have thought impossible. Not only has it
attracted individuals, businesses, tourists
and retailers, but it’s become sought-after,
trendy, the place to see and be seen. Visit
Market on Main – the market in the Arts on
Main block – on a Sunday morning and
you’ll struggle to fnd parking. The hotels
and apartments are all 100% occupied
or sold. This is not a lone street that’s
being doggedly occupied by some brave
coffee vendors and a couple of urbanites
wistfully trying to make believe they’re
in London/New York/Paris. This is a full-
fedged neighbourhood. People live, eat,
work, shop, socialise and run businesses
here. It has a beating heart and an energy
all its own.
And it exists because Liebmann and his
team at Propertuity managed to sell a
master vision of what the district could
be – if people overcame their negative
perceptions of the city, if the crime issue
could be addressed, if a critical mass
could be achieved to create a sense of a
community. That’s a lot of ‘ifs’.
However Liebmann doesn’t like the
suggestion that he is Maboneng. “The
neighbourhood is the people who live,
work and love it here. Its energy and
personality comes from them. A place
can never be about a single individual,”
he says. He’s right, of course. Maboneng’s
success lies in the fact that it has taken on
a life of its own, one that exists outside of
Liebmann’s head.
But it was there that the precinct had its
birth. Desperate to live some kind of urban
lifestyle when he returned from overseas,
Liebmann started looking for a place in
the city he could convert into a work and
live-in space. He had some experience in
property, having purchased, rennovated
and sold a few fats, the frst of which was
in Waverely when he was just 18 years old.
“I found and converted a small factory
space near 44 Stanley in Milpark and
in doing so realised two things. Firstly,
that these these old factory spaces had
development potential to become new
live-and-work spaces, and secondly that I
didn’t want to just do my own apartment. It
was then that I knew I wanted to become
a property developer,” he says.
It was an important moment in his
journey. Liebmann had run a number of
entrepreneurial businesses, including a
cleaning business and a mobile coffee
enterprise, with varying degrees of
success. “I’ve been running businesses
since I was 15 but it wasn’t till I realised
that I was passionate about property
development that I really came into my
own. Up until that point I’d been a bit
scattered, looking and pursuing a range
of opportunities. They were more or less
successful but I think of that period as
my school fees phase. I was learning
important stuff - about business and
about myself. It all came together when I
realised what I really wanted to do with my
life. The passion I felt helped me hone my
focus,” he says.
Backed by his silent partner and fnancier,
Liebmann turned his attention to fnding a
place where he could start to implement
his vision. He purchased the buildings
that would become the now-famous
Arts on Main - a unique blend of studio,
commercial and retail space that acts as
a hub for creatives and artists.
While he was creating Arts on Main he
started thinking more broadly. “That’s
when the idea for Maboneng was born
really. I started thinking about the whole
neighbourhood, the transformation of
whole east side,” says Liebmann.
Having the vision is one thing. Single-
handedly creating a neighbourhood is
another. So how did he do it? “I think there
are a number of things that came together
to bring about the success of Maboneng.
In the early days I became completely
and utterly immersed in the project.
This was absolutely critical. I lived and
worked in the space. I was construction,
marketing, sales and fnancial manager. I
did everything. It became who I was and
I think that level of passion must deliver
results eventually,” he says.
He’d also identifed the right initial target
market. Arts on Main focused on creative
people. “While travelling and in my time
living near 44 Stanley I’d learned that
artists and creatives are often the best
catalysts for change. They are the perfect
frst adopters. It’s not in any way unique
to Arts on Main. It’s been proven in
many cities throughout the world. It was
important to get them in as they would
become the foundation of the community,”
he explains.
Turns out he was right. The infux of
creative people helped to create interest
and curiosity in the media and general
public. “Maboneng was only going
to be successful if we coudl reach a
critical mass. You can’t have a vibrant
neighbourhood of ten people. That’s a
vibrant apartment block. We also needed
critical mass and to buy up stock in the
neighbourhood so that the area would
be suffciently owned by us to justify the
cost of upgrading all the infrastructure,
the lights, the trees, the pavements, the
security and the like,” he adds. The fact
that Propertuity, not the City, has done all
these things is remarkable in itself.
Another key success factor was brilliant
design. “I think the most important thing
about our company is that we are very
good at design. That’s our differentiator
and its my particular talen. If you asked
what differentiated us from other property
developers that would be it. We know how
to design spaces. I have an excellent
architect and together we’re a good
team,” Liebmann explains.
The company also knows what its about
when it comes to marketing. The design,
marketing and sales teams work together
very closely to sell the vision. “And
because we keep executing on the vision,
it strengthens people’s belief in it, and
that in turn drives the growth of the whole
venture,” he says.
Maboneng’s evolution included the
development of Main Street Life, the frst
residential building in the portfolio with
194 apartments, a 12-room hotel and a
cinema and retail on the ground foor.
It was followed by the Main Change
(45 offce spaces), Revolution House
(32 apartments and flm and recording
studios), and Fox Street Studios (a live-
and-work concept where is foor is sold or
rented to a different person).
It helps that the area is also extremely well-
located in the middle of Johannesburg,
which means it makes a lot of sense for a
lot of different people and businesses to
make it their base.
In every property the ground foor is
always retail and restaurants, driving the
neighbourhood’s unique engagement with
the street. “Our portfolio is 60% residential,
20% industrial, 10% commercial, 10%
retail. The idea is to have a complete
and sustainable community that offers
everything. People want an integrated
space where they can go downstairs,
watch a move, eat in a restaurant, walk
everywhere and ride on a bicycle,” says
Liebmann.
It’s no small irony that this is the stated
wish-list of almost every person who
buys into one of Johannesburg’s gated
communities. Of course there is the
unhappy issue of crime to discuss, and
Liebmann is not a denialist when it comes
to this most notorious aspect of Jozi.
“There’s no question - the crime in South
Africa is out of control. However, the
perceived crime in the city is not as bad
as people think. Statistically, you have a
higher chance of falling victim to crime
in Sandton than you do in the city. So it’s
been partly a matter of changing people’s
perceptions,” he says.
That said, however, he recognises that
the divide between the rich and the
poor will always lead to crime. “We have
implemented a number of unobtrusive
security measures such as private security
guards, and we’ve worked hard to foster
community interaction. It’s important in any
neighbourhood for people to know each
other. But this is also a micro-economy
- we offer both affordable and high-end
products, and in between our properties
are people who are poor. Hopefully in time
the upliftment of the area will bring greater
opportunities to these people and, with
our ethos of fostering and encouraging
entrepreneurship, they will stand to
beneft. This is a long-term solution to the
issue of crime,” he adds.
With such a successful blueprint for urban
renewal, Liebmann is unsurprisingly not
short of offers to work the same magic in
other South African cities, as well as those
abroad. He’s a typical young entrepreneur
in every other aspect except in his response
to such interest. “I don’t want to get ahead
of myself. I don’t want to become one of
those developers who talks about crazy
expansion plans. For the next couple of
years, I’m not doing anything that’s not
Maboneng. Absolute focus is what has
made this project successful to date and
its a formula I intend sticking to. Sure the
others are tempting but I need to become
a specialist in this area. There will be time
in the future to explore opportunities to
replicate the model elsewhere, but that
time is not now,” he says.
His business partner and fnancier has
reinforced this position. “He’s been an
inspiration to me,” says Liebmann. There
are those who are quick to put all of
Liebmann’s success down to the fact that
he occupies the rare and enviable position
of having someone bankroll his dream. To
such detractors his response is simple:
“It is true that getting fnance means
overcoming one of the big obstacles in
business. But it’s worth remembering a
number of things. Firstly, you don’t get
fnance because you were lucky. Winning
the lottery is lucky. Given how diffcult
everyone knows it is to get fnance, you
have to work incredibly hard to prove
you’re worth of fnance. The individual who
fnanced me has a philosophy of backing
the entrepreneur, not the business. He
backed me in previous ventures. What
he’s looking for (and he’s not unique in
this respect) is an entrepreneur with vision
and the ability to implement and make
things happen. I had to prove I had those
attributes.”
“The second thing is that getting fnance
does not represent the end-goal. You never
have enough fnance, even when you get
private equity funding. At the moment I
am looking for bank fnance, so I’m in the
same boat as other entrepreneurs.”
“Lastly,” he concludes, “I believe that if
you show a properly successful business
model backed by your proven abiltiy to
implement, there is plenty of fnance on
the table.”
Liebmann might be called visionary by
many, but those who give him this epithet
miss his true gift. It lies in his ability to
implement. Maboneng exists not just
because someone believed it could,
but rather because that person had the
ongoing, relentless, indefatigable energy,
determination, courage, fearlessness
and business sense to make the vision a
reality.
Unrealistic optimist by Juliet Pitman. Entrepreneur Magazine (cover story), February 2013 20 21 21
doc_359076866.pdf
Maboneng Growth Report 2013
2013
2013
2013
When I began with the foundations of
developing The Maboneng Precinct in 2007,
the property market had just started its
downward cycle and the Johannesburg CBD
was a complete no-go zone. Now, in 2013,
we have seen a major turnaround with the city
becoming a viable investment hotspot once
again with the broader South African property
market showing some real positive signs of
recovery.
Our frst sectional title unit in Main Street Life (the
frst residential development in The Maboneng
Precinct) was sold at R8,788 per square meter
in July 2010. Our latest unit in Main Street
Life was signed in June 2013 for R12,700 per
square meter. This amounts to nominal growth
of 45% in 36 months equating to annual growth
of 15%. To put this into perspective the national
price growth during the same during the exact
same period fuctuated between 0% and 9%
growth per annum. In addition units in Main
Street life are presently achieving yields up to
10% compared to peaking nationwide average
property yields of 6.2%
As an investor buyer, a total annual return of
20% is unique in the South African residential
market and in some cases is resulting in
people achieving a return on investment
without ever really having to incur a monthly
net cash outfow.
The fundamentals of the properties in
Maboneng are particularly solid and this
underpins the growth of these properties.
Major highways and infrastructure surround
the neighbourhood, which makes for a great
long-term property strategy. Over the last 6
months, Propertuity has successfully secured
over 350 million rands to expand on our plans
to grow the area. This growth will reinforce the
value of the buildings already developed in
that they will now be part of a much broader,
holistic vision.
We also have an added incentive in the form
of the Urban Development Zone (UDZ), which
has been extended to 2020 to allow for future
tax savings. The Propertuity portfolio alone
consists of 34 buildings in Maboneng. If one
considers that to date we have only fully
developed 5 of these buildings, you can begin
to imagine the growth in development and
value that is still to come in the precinct.
We have successfully set up 2 City Improvement
Districts (CIDs) that effectively will become the
Maboneng urban management frameworks.
This management of the public space around
our buildings will add further value to your
investment and to the lifestyle of residents in
the area. During the course of 2013, we will
be completing a number of new buildings
including Artisan Lofts, MOAD (Museum of
African Design), Curiocity, the Urban Fox,
Maverick Corner and Remed’s View. These
6 new developments will double our current
developed portfolio by year- end: a major step
forward in the overall goal of building a fully
fedged neighbourhood.
Later this year, we will also launch 5 new
developments that will be built over the next 2
years including 1,000 residential units, a hotel,
more parking, retail and offce spaces.
All of our buildings are within walking distance
of each other and will become integrated into
and connected by the Maboneng public spaces
framework.
The frst phase of Maboneng has been a great
success for all invested parties and I look
forward to welcoming on board our next round
of investors as the revolution continues.
Jonathan Liebmann,
Founder and CEO of Propertuity
June 2013
MESSAGE FROM CEO
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MESSAGE FROM CEO
I. GLOBAL PROPERTY MARKET OVERVIEW
INTERNATIONAL TRENDS
PROPERTY GROWTH IN AFRICA
URBAN REGENERATION DISTRICTS AROUND THE WORLD
II. SOUTH AFRICAN PROPERTY MARKET
NATIONAL ECONOMICAL TRENDS
JOHANNESBURG ANALYSIS
AN IMPROVED URBAN ENVIRONMENT
SOUTH AFRICAN PROPERTY MARKET INDICATORS
III. PROPERTY GROWTH IN MABONENG
INVESTING IN MABONENG
URBAN STRATEGY FOR THE PRECINCT
THE MABONENG NEIGHBOURHOOD
IV. CONTACTS
V. DISCLAIMER
VI. SOURCES / APPENDIX
VII. ADDENDUM: PRESS RELEASES & ARTICLES
TABLE OF CONTENTS
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C. URBAN REGENERATION DISTRICTS
AROUND THE WORLD
The Maboneng Precinct is member of a
growing network of urban regeneration
precincts all around the world.
Urban regeneration of former industrial
areas is now a worldwide trend, often
starting with the participation of creative
communities and private property
developers in formerly degenerated
areas. This leads to the growth of new
urban communities in upgraded, mixed-
use urban environments, with a positive
impact on property values as well as the
urban environment.
Most famous urban regeneration precincts
currently are:
B. PROPERTY GROWTH IN AFRICA
The long-term growth outlook for
Africa appears bright. With a large and
increasing young and wealthy population,
Africa has a demographic advantage that
few other parts of the world will be able to
match over the coming decades.
African economies have grown
impressively since the turn of the
millennium. A continent that has long
been associated with poverty is now
increasingly talked of in terms of its
economic dynamism and burgeoning
wealth.
After averaging growth of less than 3%
per annum during the 1980s and 1990s,
Africa’s GDP has risen by more than 5%
per annum, on average, since 2000,
outpacing most other global regions.
A. INTERNATIONAL TRENDS
Johannesburg has avoided being struck
by the global property crash as its
commercial, retail and industrial property
returns have outperformed those in every
other global city outside of South Africa
over the last decade.
Capital value appreciation in
Johannesburg has hit 7.5 per cent over
the ten years to 2011, compared to 3.6 %
for New York, 2.2 per cent % for London
and -0.1 % for Munich over the same
period.
Over a 10-year period, Johannesburg and
Cape Town have seen a growth of 7.5%
and 9.7% respectively, making these
the strongest property growth statistics
around the world.
Only a select few cities globally have
values above their pre-recession peaks –
among them Johannesburg, Cape Town,
Zurich, Munich, Toronto and Seoul.
I. GLOBAL PROPERTY MARKET OVERVIEW
Sao Paulo, Brazil
Venice Beach, Los Angeles
Conservatoriosa, Panama
Brooklyn, New York Shoreditch, London Kreutzberg, Berlin
Westwood District, Miami
Saint Teresa, Rio de Janeiro
Shoreditch, London
Via Verde, New York City
Sao Paulo, Brazil
Maboneng, South Africa
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A. NATIONAL ECONOMIC TRENDS
The continent’s largest and most mature
property investment market is, by some
distance, South Africa, where over
US$800 million of commercial property
transactions were completed during 2012
(source: Real Capital Analytics data). The
GDP Growth Forecast for SA is 4% for the
period 2013-2017 (source: International
Monetary Fund).
South Africa should remain attractive
as an entry point into the continent. The
country has been classifed second in
the World Bank “ease of doing business”
ranking (Source: World Bank)
With the South African economy slowly
starting to recover from the impact of the
recession, the country’s property market
continues to demonstrate signs of positive
growth. Conditions in South Africa are
becoming more favourable for investment,
with high general demand in the country
and competition in metropolitan areas.
Also, the market has become a more open
place for foreign investors. Overseas
buyers can now own immovable property
in South Africa without restriction, but
foreign funds remitted to the country must
be declared and documented to ensure
repatriation.
B. JOHANNESBURG ANALYSIS -
PROPERTY GROWTH IN THE INNER-CITY
Joburg CBD is benefting from a variety of
new developments, and attracting more
and more investment from the private
sector. While some of these developments
projects are still in the design stage,
several are already in progress (Source:
Broll). The Mandela Bridge, the Newton
Precinct, Constitution Hill, are a few
of these recent projects. Forthcoming
projects like the Newtown Junction
(reconversion by Atterbury of the potato
sheds in Newtown into a mixed-used
development comprising a shopping
centre,offces, hotel, gym, and four levels
of basement parking) or Stimela Square
(mixed-use development by Abland) will
also add major value to the inner city of
Johannesburg.
Over the past few years, new residential
projects have been completed within the
inner-city with increased focus on the
middle to higher income market. Joburg
city now offers a mixed-use environment
that has, in recent years, been attracting
high-income residential developments,
sometimes conversions of degenerated
offce properties into loft style apartments.
Property developers (AFHCO, City Prop,
Propertuity) and funders (TUHF, ABSA,
NEDBANK) continue to play a very
important role in the regeneration of the
inner-city.
The Urban Development Zone tax
Incentive has driven further investment
into the inner-city of Johannesburg
(see chapter IV – D). With regards to
rentals, prices are very competitive
and particularly attractive for emerging
businesses. The positive growth in market
rentals, increasing capital values and
declining vacancy trends refect a positive
investment climate.
AN IMPROVED URBAN ENVIRONMENT
The development of City Improvement
Districts (CID) within the inner-city had
a very positive impact in terms of safety
and cleanliness in these urban areas.
The Maboneng Precinct is currently in the
process of establishing its own CID.
In terms of transportation, Park Station is
one of the largest public transport hubs
in South Africa. The Maboneng Precinct
is connected to Park Station daily via
its private shuttle service “MABO’go”.
Moreover, the BRT system “Rea Vaya” has
improved the pubic transport connections
within the inner city. Finally, the railway
network in the inner city will beneft in the
next years from massive investment into
upgrades.
II. SOUTH AFRICAN PROPERTY MARKET
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III . PROPERTY GROWTH IN MABONENG
THE RESIDENTIAL MARKET
Residential apartments in the Maboneng
Precinct have achieved consistent
price growth over the past 3 years with
medium sized units showing the strongest
initial growth. More recently, penthouse
units have shown the strongest growth
as demand for larger apartments has
increased over the 3 year period.
With a limited supply of larger penthouse
units and further development of small to
mid sized apartments, price growth per
square meter was seen to be strongest in
these 2 unit types, particularly the smaller
units which are currently selling for just
under R12,000 per square meter. Growth
per square meter has been positive
throughout the portfolio and indications
are that growth will continue in the
forseable future.
SINCE 2010
Artwork by Steve Espo Powers - photgraph by Martha Cooper for Adidas I ART Joburg
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2013
RELATIONSHIPS WITH BANKS
Propertuity Management has developed
strong relationships with the major banks in
South Africa who have consistently funded
acquisitions throughout developments in
the Precinct. Depending on the fnancial
position of a purchaser, bonds of up to
100% have been granted.
FOREIGN INVESTMENT
Foreigners can own immovable property in
South Africa without restriction. However,
all foreign funds remitted to the country
must be declared and documented to
ensure repatriation. The property must
also be endorsed ‘non-resident’, as a
condition for repatriation.
Non-resident investors have to pay
Capital Gains Tax when they later sell their
properties. The purchaser of the property
is required to deduct a prescribed %age
from the proceeds of the sale and remit
it directly to the South African Revenue
Service before paying the balance to the
seller.
URBAN DEVELOPMENT ZONE INCENTIVE
The Maboneng Precinct falls within the
Urban Development Zone.
The UDZ Tax Incentive is a tax rebate
that reduces the taxable income of the
taxpayer.
It is an accelerated depreciation
allowance applicable to investors who
erect new buildings or refurbish existing
buildings within the demarcated Urban
Development Zone with the purposes of
trade. The aim of the UDZ tax incentive
is to revitalize these urban areas and
business districts, thereby stimulating
economic development. In 2005 the UDZ
legislation was amended to extend the
allowance to sectional title owners and
investors that purchase buildings from
developers.
The City and Suburban area that the
Maboneng Precinct falls in is within the
designated UDZ zone and therefore the
incentive applies to all of the Maboneng
developments but is only applicable
on property bought directly from the
developer.
The tax incentive reduces the taxable
income of a taxpayer. The incentive is
not limited to the current year’s taxable
income of the taxpayer and can be
carried forward as an accumulated tax
loss for use to shield taxable income in
future years.
AMOUNT
The tax incentive amounts to 30% of the
purchase price of the property over a 5
year period. For example, on a R500,000
apartment, the tax incentive would be
R150,000 over a 5 year period which
equals R30,000 per year off set against
taxable income.
The current UDZ Incentive was set to
expire in 2014 but it has been extended
to 2020.
INVESTING IN MABONENG
Arts on Main 2009
Main Street Life - 2010
Revolution House - selling price per unit
Average growth - 60%
Average annual growth 20%
During the worst property market performance in SA history.
Revolution House - 2010
Fox Street Studios - 2012
Arts on Main 2010
Main Street Life - 2011
Revolution House - 2011
Fox Street Studios - 2013
Arts on Main interior
Main Street Life - Interior
Revolution House - Interior
Fox Street Studios - Interior
10 11
Main Street Life - selling price per unit
Arts on Main - selling price per SQM
2013
URBAN STRATEGY FOR THE PRECINCT
The creation of a walkable, diverse and
sustainable neighbourhood is as important
as the architectural reconversion of
industrial buildings. With this objective in
mind, Propertuity has commissioned:
URBAN DESIGN FRAMEWORK
An Urban Design Framework (UDF)
for the Maboneng Precinct has been
commissioned by Propertuity to
UrbanWorks, an inter-disciplinary design
studio located in the Maboneng Precinct.
The UDF provides tools for spatial growth
(parking strategy, public spaces, special
projects, etc).
MABONENG 2.0
“Maboneng 2.0” is name given to the
second major development phase of the
Maboneng Precinct. The ”Maboneng
2.0” mobile exhibition retraces the spatial
and conceptual growth of Maboneng.
It explains how the creative re-use of
predominantly vacant post-industrialised
spaces has reshaped the built environment
into hybrid architecture providing an
infrastructure for collective encounters,
new engagements and an energetic
neighbourhood – and how Propertuity
further plans to create a sustainable
neighbourhood through the development
of buildings and public space.
CITY IMPROVEMENT DISTRICT INITIATIVE
City Improvement Districts (CID)
are successful urban management
initiatives around the world and in
Johannesburg. It allows property owners
to contribute towards an additional levy
for supplementary and complimentary
services in order to maintain cleanliness
and safety in their geographic area.
The Maboneng Improvement District is
currently being legislated.
The advantages of establishing a CID:
· The cost of providing supplementary
services will be borne by all property
owners
- Costs are borne in proportion to the
value of the property
- The Improvement District approach is
holistic
- Provides enhancement of the
environment and strengthens investor
· The Improvement District creates a
positive identity for the area
· The Improvement District provides
private sector management and
accountability
· The improvement of property values
· To put forward ideas for change to
council
Source: www.cityimprovement.co.za
CONNECTION WITH NEIGHBOURING AREAS
The Maboneng Precinct are in active
discussions with its neighbouring
stakeholders in order to create physical
or touristic connections between the main
precincts of the inner and the East city of
Johannesburg. Current projects are a fan
walk connecting Ellis Park and Maboneng,
as well as cyclable lanes between the
ABSA and the Maboneng precincts.
In terms of projects powered by The
Maboneng Precinct, the strategy is
inclusive of all neighbouring areas, working
to fostering a strong local economy.
Above
Lef: Glass showcase at the main
intersection of Fox and Kruger
Above Right:
Te big picture
Right:
Of the Grid will be converted
into a play area with parking,
Below:
Spider Web Lighting
Above:
Maboneng Canal - Located between two buildings overlooking an existing canal, the proposal seeks to exploit the space as a lively passage between Fox and Main Streets.
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Over the past few years, Maboneng has
fast established itself as one of the most
exciting residential neighbourhoods in
Johannesburg, offering its residents so
much more than just a place to live, but
quality lifestyle as well.
With a focus on the provision of a variety
of lifestyle spaces within an authentic
urban area, as well as practical services,
Maboneng provides the opportunity to
live, create and collaborate all in the same
area.
AMENITIES | TRANSPORTS
The Maboneng Precinct is located close
to Jeppe train station, Rea Vaya BRT
Stations routes and other transport hubs
including Gautrain at Park Station (daily
connection through the MABO’go shuttle).
- Retail
- Restaurants
- Public facilities (Police Station, hospitals)
IV. CONTACTS
THE MABONENG NEIGHBOURHOOD
MABONENG MEMBERSHIP
The MABONENG membership is a
benefts program exclusive to members
of the Maboneng community. It is a
community program that not only rewards
the members of the urban community, but
motivates residents to use the facilities,
services and offerings in Maboneng to
live more consciously and engage in
Maboneng’s urban lifestyle. Benefts
include discounts at fashion retailers,
residents specials at restaurants, free
entertainment, fashion and art previews
as well as discounts on second property
purchases.
MADE IN MABONENG & DIRECTORY
Made in Maboneng is a local buying
philosophy physically manifested in the
Maboneng directory. Made in Maboneng
encourages the buying of goods and
services supplied and produced in the
immediate area. The main objective
of the initiative is to create a strong
integrated local economy that offers
growth opportunities to all entrepreneurs
operating in the community.
PROPERTUITY OFFICE
Unit 504 The Main Change
20 Kruger Street, 2094, Johannesburg
Maboneng Precinct
City and Suburban,
Johannesburg, South Africa
Tel: +27 11 592 0513
INFORMATION:
Bheki Dube : +27 72 880 9583
[email protected]
SALES & RETAIL SPACES:
Shruthi Nair: +27 82 602 3628
sales@mabonengprecinct. com
Sunday- Thursday
MAIN STREET LIFE RENTALS:
Rofhiwa Makhado: +27 73 111 8099
[email protected]
PRESS/ CULTURAL PROJECTS:
Hayleigh Evans
[email protected]
Sunday- Thursday
EVENTS & VENUE HIRE:
Westleigh Wilkinson : +27 82 559 2259
[email protected]
AERIAL EMPIRE
14 15
2013
Please note that Propertuity can’t
guarantee the accuracy of the information
provided from exterior sources in this
report. It is expressly recorded that
information provided in this report is not
intended to constitute legal, fnancial,
accounting, tax, investment, consulting or
other professional advice.
VI. SOURCES / APPENDIX
- ABSA:http://www.absa.co.za/
- Briefng :http://www.briefng.com
- Broll:http://www.broll.co.za
- Demacon Market Studies
- FNB:https://www.fnb.co.za/
- Global Property Guide :
http://www.globalpropertyguide.com
- Knight Frank:
http://www.knightfrank.com
- Pam Golding:
http://www.pamgolding.co.za
- Rode Property Consultants:
http://www.rode.co.za
- SA Property Transfer guide:
www.home.sapropertytransferguide.com
- South African Reserve Bank :
http://www.resbank.co.za
- Stats SA:http://www.statssa.gov.za
- City Improvement:
www.cityimprovement.co.za
17
MABONENG PRECINCT LAUNCHES
JOHANNESBURG INNER CITY INTO
THE FUTURE
It began in 2009 with the regeneration
of one derelict old warehouse building,
into what has become Johannesburg’s
creative hub – Arts on Main. And today,
Maboneng is one of the leading urban
renewal movements in the city. Apart
from attracting residents and businesses,
it is also paving the way for the creation
of connected urban neighbourhoods in
Johannesburg.
By recentralising and making use of
otherwise empty buildings, the Maboneng
Precinct is lifting the overall reputation of
Johannesburg both locally and abroad.
Not only is Maboneng creating new
entrepreneurs, but also attracting tourists
and foreign investment into the city, and
boosting the economy.
The next phase, Maboneng 2.0 – unveiled
on 1 November with an interactive
exhibition at Arts on Main – is promising
much more growth and rejuvenation.
Development company Propertuity,
together with Architects, Daffonchio
and Associates and UrbanWorks
architecture and urbanism have designed
a comprehensive plan for the evolving
neighbourhood.
With 25 buildings to be developed as
part of the Maboneng Precinct, they plan
to further optimise the use of public spaces
and connect existing regeneration efforts,
inviting the public to actively participate in
this shared urban future.
– A future where Maboneng is expected
to increase by a further 25 properties
to a total of 50 buildings – allowing the
community to grow, with residents set to
increase from 500 to 3,000, and workers
from 500 to 1,500.
In the three short years since the beginning,
commercial prices in Maboneng have
nearly doubled, and in the two years since
Main Street Life was launched, residential
price growth has been around 30%,
selling at an 11% yield to investors. And
Maboneng 2.0 holds the promise of much
more growth.
With the guarantee that many more
buildings in the neighbourhood will
continue to be uplifted, inevitably resulting
in properties increasing in value, the
Maboneng precinct is a prime investment
opportunity for those interested in the
regeneration of Johannesburg.
To date, roughly R300m has been
invested in the precinct, and some of the
most valuable properties in Johannesburg
are part of the neighbourhood – including
Jewell City, currently valued at R350m.
With Maboneng 2.0, a further R500m
is expected to be invested into the
neighbourhood. On top of that, hundreds
of jobs will be created too – through
construction work in the buildings,
employment in the buildings for building
managers, cleaners, security and more,
and through new businesses being set up
in the buildings.
According to Hayleigh Evans, brand
manager at Propertuity, 2.0 is about not
only showing that they have invested in
the buildings in the area, and have placed
a large focus on creating well designed
spaces in these buildings, they have also
invested time, money and professional
skill into a greater urban plan for the
area, focusing on connecting Maboneng.
“The investment into public space shows
a great commitment to the area, the
community and Johannesburg,” she says.
Extending from Arts on Main into the
neighbourhood with live music and
street art, the Maboneng 2.0 interactive
exhibition launch was a huge success,
attended by a diverse range of people
including current residents, investors and
people from the city.
Among the esteemed guests were Sharon
Lewis of the Johannesburg Development
Agency, top artist William Kentridge,
Monica Albonico, the Director of Arts
and Culture for the City of Johannesburg
Steven Sack, and the French Ambassador
in SA.
And the key success of the exhibition is
its accessibility, in that it makes it easy
for guests to understand and interpret a
very complex and well- researched urban
plan. The exhibition also offers anyone –
even those who haven’t been involved,
interested or invested in Maboneng at
all – the chance to get involved. It tells
the story of Maboneng to date, the future
plans and allows you to share in the vision
for this part of the city.
The exhibition will be running at Arts on
Main until 8 November, and thereafter it
will be displayed in the entrance gallery at
Main Street Life.
Maboneng Editorial Contact:
Hayleigh Evans
Brand Manager for the Maboneng Precinct
[email protected]
www.mabonengprecinct.com
V. DISCLAIMER VII. ADDENDUM: PRESS RELEASES & ARTICLES 16
2013
Support from Nedbank assists with the
growth of urban regeneration in downtown
Johannesburg
The conclusion of loan agreements in
excess of R85 million between Propertuity,
developers of the Maboneng Precinct,
and Nedbank Corporate Property Finance
have shown a new level of bank support
for the growing urban regeneration efforts
in downtown Johannesburg.
Nedbank has come on board with
Propertuity’s regeneration efforts,
fnancing acquisitions of a number of new
properties in The Maboneng Precinct
as the neighbourhood expands, as well
as fnancing a number of completed
developments.
The Maboneng Precinct, now an urban
neighbourhood spanning several city
blocks, began with the development of
Arts on Main in 2009. The neighbourhood
is now made up of over seven completed
developments, including Main Street
Life and the Halala award winning The
Main Change, and the developers’
property portfolio now totals 30 buildings
in the immediate area to be developed
over the next few years. Until recently,
Johannesburg’s leading regeneration
neighbourhood, The Maboneng Precinct,
has been completely funded by the private
sector. “The willingness of Nedbank to
come on board and back the regeneration
efforts marks a new phase of support of the
efforts. We believe that we have already
proven a sustainable and proftable model
with current developments in Maboneng,
and the support of senior debt fnance
allows us to continue to grow this model,”
says Propertuity’s director, Eric Herr.
The Nedbank loans have been used to
fund single and multi tenanted commercial
and industrial properties in the area, and
the bank is currently looking at funding the
purchase of further properties. The frst
loans were issued in September of 2012
and within the last six months, Nedbank
has signifcantly increased its lending in
the Precinct.
Says Ken Reynolds, Nedbank Corporate
Property Finance regional executive
for Gauteng, “Nedbank is proud to be
associated with the highly successful
Maboneng Precinct. The funding we
have provided to the project illustrates
our commitment to the regeneration of
South Africa’s urban environments, which
we believe Maboneng has achieved
admirably.”
The properties fnanced by Nedbank
will all form part of the future growth of
Maboneng, and will be redeveloped in
line with what has already taken place in
Maboneng, attracting further businesses
and residents into the neighbourhood,
contributing to the already thriving local
economy and encouraging investment
from further individuals and businesses
into Johannesburg City.
Press contact:
[email protected]
| www.mabonengprecinct.com
NEDBANK BACKS JOHANNESBURG’S MABONENG DEVELOPMENT 19
2013
In downtown Johannesburg on the far
east side of the city a group of twenty-
something-year-olds are running a
neighbourhood that they’ve transformed
from a no-go area into a hip, vibrant urban
community. Take a walk down the street
here and you’ll pass trendy restaurants
and coffee bars. Look up and you’ll see
modern urban apartments and rooftop
hangouts where young professionals,
creatives and entrepreneurs take in the
sunset over the city skyline. There are
art galleries, collaborative work spaces,
cinemas and there is an eclectic mix of
people on the street – international tourists
and homecoming-revolution expats,
businesspeople, students and artists. The
pavements are clean and tree-lined and
the area is well-maintained. It’s an equally
far cry from the seedier areas of town and
the high-walled, electric-fenced suburbs
of the North.
This is the Maboneng Precinct and
ten years ago its very existence would
have been unimaginable. The east side
of Johannesburg was seedy, crime-
ridden and dilapidated. (Much of
central Johannesburg still is). The Stock
Exchange and big business had long
since moved out, making Sandton the new
CBD. Respectable people didn’t want to
drive through there; the suggestion that
they live there would have been at once
horrifying and laughable.
And then a youngster came home from
a gap year overseas, and felt an aching
longing for the urban lifestyle he’d
experienced and come to love in cities
around the world. Why, he asked, wasn’t
the same thing possible in Joburg.
His name is Jonathan Liebmann and what’s
remarkable about his story is that he has
almost single handedly been responsible
for breathing life into Maboneng. There are
of course countless examples of urban
renewal in cities around the world but
most of them required the intervention of
a forward-thinking mayor or no-nonsense
police chief to clean up the crime, and the
strategic input and collective effort of a
dedicated municipality – not to mention
some kind of incentive scheme to entice
business and people back to the city.
Maboneng has had none of that and yet
its achieved what most people would
have thought impossible. Not only has it
attracted individuals, businesses, tourists
and retailers, but it’s become sought-after,
trendy, the place to see and be seen. Visit
Market on Main – the market in the Arts on
Main block – on a Sunday morning and
you’ll struggle to fnd parking. The hotels
and apartments are all 100% occupied
or sold. This is not a lone street that’s
being doggedly occupied by some brave
coffee vendors and a couple of urbanites
wistfully trying to make believe they’re
in London/New York/Paris. This is a full-
fedged neighbourhood. People live, eat,
work, shop, socialise and run businesses
here. It has a beating heart and an energy
all its own.
And it exists because Liebmann and his
team at Propertuity managed to sell a
master vision of what the district could
be – if people overcame their negative
perceptions of the city, if the crime issue
could be addressed, if a critical mass
could be achieved to create a sense of a
community. That’s a lot of ‘ifs’.
However Liebmann doesn’t like the
suggestion that he is Maboneng. “The
neighbourhood is the people who live,
work and love it here. Its energy and
personality comes from them. A place
can never be about a single individual,”
he says. He’s right, of course. Maboneng’s
success lies in the fact that it has taken on
a life of its own, one that exists outside of
Liebmann’s head.
But it was there that the precinct had its
birth. Desperate to live some kind of urban
lifestyle when he returned from overseas,
Liebmann started looking for a place in
the city he could convert into a work and
live-in space. He had some experience in
property, having purchased, rennovated
and sold a few fats, the frst of which was
in Waverely when he was just 18 years old.
“I found and converted a small factory
space near 44 Stanley in Milpark and
in doing so realised two things. Firstly,
that these these old factory spaces had
development potential to become new
live-and-work spaces, and secondly that I
didn’t want to just do my own apartment. It
was then that I knew I wanted to become
a property developer,” he says.
It was an important moment in his
journey. Liebmann had run a number of
entrepreneurial businesses, including a
cleaning business and a mobile coffee
enterprise, with varying degrees of
success. “I’ve been running businesses
since I was 15 but it wasn’t till I realised
that I was passionate about property
development that I really came into my
own. Up until that point I’d been a bit
scattered, looking and pursuing a range
of opportunities. They were more or less
successful but I think of that period as
my school fees phase. I was learning
important stuff - about business and
about myself. It all came together when I
realised what I really wanted to do with my
life. The passion I felt helped me hone my
focus,” he says.
Backed by his silent partner and fnancier,
Liebmann turned his attention to fnding a
place where he could start to implement
his vision. He purchased the buildings
that would become the now-famous
Arts on Main - a unique blend of studio,
commercial and retail space that acts as
a hub for creatives and artists.
While he was creating Arts on Main he
started thinking more broadly. “That’s
when the idea for Maboneng was born
really. I started thinking about the whole
neighbourhood, the transformation of
whole east side,” says Liebmann.
Having the vision is one thing. Single-
handedly creating a neighbourhood is
another. So how did he do it? “I think there
are a number of things that came together
to bring about the success of Maboneng.
In the early days I became completely
and utterly immersed in the project.
This was absolutely critical. I lived and
worked in the space. I was construction,
marketing, sales and fnancial manager. I
did everything. It became who I was and
I think that level of passion must deliver
results eventually,” he says.
He’d also identifed the right initial target
market. Arts on Main focused on creative
people. “While travelling and in my time
living near 44 Stanley I’d learned that
artists and creatives are often the best
catalysts for change. They are the perfect
frst adopters. It’s not in any way unique
to Arts on Main. It’s been proven in
many cities throughout the world. It was
important to get them in as they would
become the foundation of the community,”
he explains.
Turns out he was right. The infux of
creative people helped to create interest
and curiosity in the media and general
public. “Maboneng was only going
to be successful if we coudl reach a
critical mass. You can’t have a vibrant
neighbourhood of ten people. That’s a
vibrant apartment block. We also needed
critical mass and to buy up stock in the
neighbourhood so that the area would
be suffciently owned by us to justify the
cost of upgrading all the infrastructure,
the lights, the trees, the pavements, the
security and the like,” he adds. The fact
that Propertuity, not the City, has done all
these things is remarkable in itself.
Another key success factor was brilliant
design. “I think the most important thing
about our company is that we are very
good at design. That’s our differentiator
and its my particular talen. If you asked
what differentiated us from other property
developers that would be it. We know how
to design spaces. I have an excellent
architect and together we’re a good
team,” Liebmann explains.
The company also knows what its about
when it comes to marketing. The design,
marketing and sales teams work together
very closely to sell the vision. “And
because we keep executing on the vision,
it strengthens people’s belief in it, and
that in turn drives the growth of the whole
venture,” he says.
Maboneng’s evolution included the
development of Main Street Life, the frst
residential building in the portfolio with
194 apartments, a 12-room hotel and a
cinema and retail on the ground foor.
It was followed by the Main Change
(45 offce spaces), Revolution House
(32 apartments and flm and recording
studios), and Fox Street Studios (a live-
and-work concept where is foor is sold or
rented to a different person).
It helps that the area is also extremely well-
located in the middle of Johannesburg,
which means it makes a lot of sense for a
lot of different people and businesses to
make it their base.
In every property the ground foor is
always retail and restaurants, driving the
neighbourhood’s unique engagement with
the street. “Our portfolio is 60% residential,
20% industrial, 10% commercial, 10%
retail. The idea is to have a complete
and sustainable community that offers
everything. People want an integrated
space where they can go downstairs,
watch a move, eat in a restaurant, walk
everywhere and ride on a bicycle,” says
Liebmann.
It’s no small irony that this is the stated
wish-list of almost every person who
buys into one of Johannesburg’s gated
communities. Of course there is the
unhappy issue of crime to discuss, and
Liebmann is not a denialist when it comes
to this most notorious aspect of Jozi.
“There’s no question - the crime in South
Africa is out of control. However, the
perceived crime in the city is not as bad
as people think. Statistically, you have a
higher chance of falling victim to crime
in Sandton than you do in the city. So it’s
been partly a matter of changing people’s
perceptions,” he says.
That said, however, he recognises that
the divide between the rich and the
poor will always lead to crime. “We have
implemented a number of unobtrusive
security measures such as private security
guards, and we’ve worked hard to foster
community interaction. It’s important in any
neighbourhood for people to know each
other. But this is also a micro-economy
- we offer both affordable and high-end
products, and in between our properties
are people who are poor. Hopefully in time
the upliftment of the area will bring greater
opportunities to these people and, with
our ethos of fostering and encouraging
entrepreneurship, they will stand to
beneft. This is a long-term solution to the
issue of crime,” he adds.
With such a successful blueprint for urban
renewal, Liebmann is unsurprisingly not
short of offers to work the same magic in
other South African cities, as well as those
abroad. He’s a typical young entrepreneur
in every other aspect except in his response
to such interest. “I don’t want to get ahead
of myself. I don’t want to become one of
those developers who talks about crazy
expansion plans. For the next couple of
years, I’m not doing anything that’s not
Maboneng. Absolute focus is what has
made this project successful to date and
its a formula I intend sticking to. Sure the
others are tempting but I need to become
a specialist in this area. There will be time
in the future to explore opportunities to
replicate the model elsewhere, but that
time is not now,” he says.
His business partner and fnancier has
reinforced this position. “He’s been an
inspiration to me,” says Liebmann. There
are those who are quick to put all of
Liebmann’s success down to the fact that
he occupies the rare and enviable position
of having someone bankroll his dream. To
such detractors his response is simple:
“It is true that getting fnance means
overcoming one of the big obstacles in
business. But it’s worth remembering a
number of things. Firstly, you don’t get
fnance because you were lucky. Winning
the lottery is lucky. Given how diffcult
everyone knows it is to get fnance, you
have to work incredibly hard to prove
you’re worth of fnance. The individual who
fnanced me has a philosophy of backing
the entrepreneur, not the business. He
backed me in previous ventures. What
he’s looking for (and he’s not unique in
this respect) is an entrepreneur with vision
and the ability to implement and make
things happen. I had to prove I had those
attributes.”
“The second thing is that getting fnance
does not represent the end-goal. You never
have enough fnance, even when you get
private equity funding. At the moment I
am looking for bank fnance, so I’m in the
same boat as other entrepreneurs.”
“Lastly,” he concludes, “I believe that if
you show a properly successful business
model backed by your proven abiltiy to
implement, there is plenty of fnance on
the table.”
Liebmann might be called visionary by
many, but those who give him this epithet
miss his true gift. It lies in his ability to
implement. Maboneng exists not just
because someone believed it could,
but rather because that person had the
ongoing, relentless, indefatigable energy,
determination, courage, fearlessness
and business sense to make the vision a
reality.
Unrealistic optimist by Juliet Pitman. Entrepreneur Magazine (cover story), February 2013 20 21 21
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