Re-development in Soweto

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south-africaredevelopment-in-sowetoThe Soweto Theatre in the heart of Soweto has garnered a lot of national attention over the past year or so.

The R150million (US$18million) theatre has been hailed for its unique architecture and for its potential to boost tourism in this area.
This iconic theatre is however only the start of a massive development that is transforming the Jabulani CBD into a vibrant node.

Less publicised is the completion of the Jabulani Mall, adjacent to the theatre, as well as the Jabulani Hostels and the housing development currently underway around these two buildings.

Niche developer involved
Niche property developer Calgro M3 recently began construction of the Public-Private-Partnership (PPP) project with its partner, Urban Dawn. The R117 million redevelopment of the first phase of the Jabulani Hostels in Soweto started delivering on its undertakings to stakeholders at the start of 2010.

The formal sod-turning function, attended by MEC of Housing and Local Government Kgaugelo Lekgoro, MP Bonkosi Dlamini and City of Johannesburg’s Sheila Mahlangu as well as the Hostel’s leadership and residents, was held at the end of August 2010.  Calgro is partnering with Gauteng Province in the project and Nedbank Property Finance: Affordable Housing division provided bridging finance for construction over the next two years.

Calgro CEO Ben Pierre Malherbe says the Jabulani Hostels project is another milestone en route to becoming the public sector’s preferred partner in the ‘Breaking New Ground’ (BNG) policy on integrated housing developments.

“The Jabulani Hostels project is in line with our strategy of urban regeneration leveraging our strong relationships with provincial and local government as well as the banks.”  Work on the project commenced in September 2010, while completion of the first phase of 500 units is scheduled for 2012. Centrally located near the Jabulani Mall and adjacent to the Jabulani CBD development (developed by Calgro and black empowerment partner Inkanyeli Projects), the Hostels are situated in a fast-growing urban node.

The first phase of re-development will comprise 500 units, 80percent of which will be BNG housing (formerly referred to as RDP housing) with the balance being rental units subsidised by government.

As for the project team, Calgro M3 has provided a complete solution for the clients. From quantity surveying to construction to marketing, Calgro has provided the services.

CBD developing
Another development underway is the Jabulani CBD which is taking place on 21 hectares of property owned by the Johannesburg Property Company. Calgro’s partner on this is black owned company, Inkanyeli Projects. This contract included the Theatre as well as the construction of 4199 residential units.

Development funding is provided by Standard Bank which has approved around R193 million (US$ 23.5million) for the development so far.

The cost of the entire development is in the region of R1.35 billion (US$160 million) and includes the construction of the Jabulani Hospital.

Calgro M3 marketing director, Charl Cornelissen tells Construction Review that the company has learned one valuable lesson in developing this property.

“We experienced a number of setbacks relating to snags in the building process and financing and property zoning issues.

Nevertheless we needed to continually get the units ready and sell them, ensuring customer satisfaction along the way,” he says.

He adds that the experience has also taught the team a number of lessons going forward. “We actively review units for quality before clients are invited to do a pre inspection.  We aim to make sure that the units are near to perfect before we invite clients for a final inspection.

Our snags are getting fewer as a result and we are moving faster and faster with greater efficiency,”Cornelissen adds.

“We started to see the benefit of dividing the development into smaller and smaller packages of four or five blocks at a time. It required a lot of coordination but the result was that we were constantly moving units instead of the stop-start method that we had been employing up to that stage. It means that the revenue stream is at least constant if not big at any given time,” he points out.

Calgro M3 is also utilising the lessons it has learned at another project in Cape Town with similar dimensions.

Project team
Calgro M3 – main contractor, developer, quantity surveyor.
Inkanyeli Projects – construction partner, Jabulani CBD
Urban Dawn – partner, Jabulani Hostels