Reclaiming Joburg CBD
Property experts say affordable accommodation in the Johannesburg central business district (CBD) is attracting young tenants to the inner city - helping to drive its renewal.
Thanks to the Affordable Housing Company (Afhco), which is transforming the grimy inner-city blocks into funky and desirable urban accommodation, the CBD is being brought back to life again.
By making accommodation affordable and accessible, the developments are helping to attract a young workforce, creating a sense of community and rejuvenating the city centre.
This despite the rent increases expected to go even higher in the next 10 years.
According to the national property letting agent, Trafalgar, the average tenant is paying nearly 30percent more than he did three years ago.
But Trafalgar argues that these high prices will not discourage potential tenants because the renewal of the CBD is strong and major developments are taking place.
Afhco, which is 50percent owned by Old Mutual's Infrastructure, Development and Environmental Assets Fund (Ideas), says South Africa is following international trends - focusing on the transformation of city centres into highly sought after residential areas where "sky space" comes at a premium.
Property experts believe that last year "affordable suburbs" experienced some of the market's highest growth and this trend is likely to carry on because buyers seek better value for money.
The experts say buyers are careful not to stretch themselves due to rising interest rates.
An inner-city success story will see 4000 more affordable, quality, secure flats being developed in the CBD.
Afhco says existing 2000 secure apartments have already been snapped up by tenants wanting to live closer to work.
The company says it is currently tackling three areas of the Johannesburg CBD, New Doornfontein, the Jeppe Street area and the fashion precinct in the northeast CBD.
The buildings, according to Sean Friend of the Old Mutual Ideas Fund, are converted into blocks with bachelor units.
Because tenants' priorities are safety and cleanliness. The blocks are access-controlled, with a turnstile and thumbprint scanner.
Visitor access is controlled by security guards. There is a laundry area and tenants may not hang washing on balconies.
Most of the units have built-in kitchen counter tops and fridges. Some of the blocks have a gym and a creche.
The company is likely to offer broadband access because tenants are already online.