South African Business 2016 edition

FOCUS A Catalyst for

FOCUS A Catalyst for Economic Development Johannesburg’s Urban Development Zone Tax Incentive is driving Gauteng’s development. The City of Johannesburg’s Inner City has a highly developed economic infrastructure and is the second most productive of Joburg’s Regions, adding about 23% to the City’s economy, a share larger than some of South Africa’s metropolitan economies combined. It continually demonstrates its economic powerhouse status by the fact that it houses the headquarters of several powerful mining houses, fi nancial services and expanding multi-national corporations. It also boasts several high-rise sectional title apartments and condominiums. However, as has been the trend internationally with large cities, economic factors in the 1980s caused Joburg’s Inner City to experience urban deterioration. These factors threatened the ‘heartbeat’ of the city. “One should not think that such a state of affairs was unique to Johannesburg”, says Lebo Ramoreboli, Deputy Director responsible for the Johannesburg Urban Development Zone (UDZ). She says Cape Town and many other municipalities who experienced similar urban deterioration. In 2004, the South African government, at the cities’ request, introduced the innovative UDZ tax incentive to assist Municipalities to revitalise their derelict CBDs and thus reverse their urban decline. This helped them to create new opportunities for the improvement and development of lo- cal Central Business Districts (CBDs). “The UDZ tax incentive has enhanced Joburg’s attractiveness as a preferred destination for property-related investment for new as well as existing investors, and has encouraged corporate and other residents to remain and expand their foothold in the CBD. It has helped to drive our mandate to transform the Inner City into a vibrant and dynamic economic node that will attract everyone, including international investors,” says Ramoreboli. Already more than R13-billion worth of investment has come into the CBD. “This initiative is an important economic tool that has assisted the City to further create Park Station renderings. SOUTH AFRICAN BUSINESS 2016 166

an enabling environment for business in the property sector, hence the visible economic revitalisation that is taking place in the Inner City,” says Ruby Mathang, Member of Mayoral Committee (MMC) responsible for Economic Development. “Through this initiative we hope to encourage transformation of property ownership patterns that will involve large and small investors, black investors as well as women and the youth. We are looking forward to a city that is fundamentally different from the past, a city that embraces non-racialism, a city that embraces all cultures and religions, a cosmopolitan city that will attract not only South Africans but people from around the world.” MMC Mathang strongly emphasises the importance of the tax incentives: “The UDZ gives impetus for the other city departments to focus their efforts and spend on the areas such as those where the UDZ has attracted the renewal and developments seen thus far,” says Mathang. Live, Work and Play in the City Ravi Naidoo, the Executive Director for Economic Development under whom the Urban Development Zone tax incentive resides, expressed appreciation of the innovativeness of investors that has led to the creation of thematic precincts such as University City in Braamfontein (a whole-lifestyle precinct for students and emerging graduates). Other developments, such as those in Newtown, have been revived in the form of a combination of residential and retail spaces. This is in addition to the Zurich Building, Turbine Square precinct that comprises the headquarters of AngloGold Ashanti and The Forum, a unique conference centre. In Marshalltown, Ferreirasdorp, Doornfontein and part of Jeppestown attractive districts and streetscapes have been created such as Maboneng and Arts-on-Main, Fox Street, Ghandi Square and the Main Street precincts. “Expansion of the FNB’s Bank City has created an exemplary precinct comprised of the fi nancial services sector with signifi cant retail and offi ce space. It is one of the most attractive places in our City. It has continued to expand and attract investors into the node,” continues Naidoo. The idea is to rejuvenate the City of Johannesburg as a city where people can live, work and play by supporting the creation of several mixed-use precincts that attract a diverse range of investors, businesses, visitors and residents. Standard Bank continues to expand its Inner City premises, a further confi rmation of the FOCUS Future Mandela Park renderings. Inner City’s status as a fi nancial services’ hub. There is also a new trend that refl ects young investors’ appetite to purchase sectional title units. This is in accordance with our desire to lure young black professionals and women to come and invest in property within the various precincts of our Inner City and thus gradually diversify property ownership patterns,” adds Naidoo. The area adjoining the railroad that extends from Park Station to Fordsburg and from Park Station to Doornfontein is another potential area for new kinds of precincts in partnership with the private sector. Fordsburg can become a design centre to enhance activities that currently exist. Newtown is currently a cultural district, but has the potential to better align with academic activities due to its proximity to Wits University. There are also plans in place to commercialise Park Station as the biggest transit node in Africa by developing it to its prospected capacity, which is estimated to be 10 times the current size of Sandton City. “For the fi rst time, and as a result of the Gautrain roll-out, 167 SOUTH AFRICAN BUSINESS 2016