Authors: Melissa Leibowitz – Director & Hopewell Sathekge – Senior Associate
It is said that the shift from rural to urban population is the most significant phenomenon since independence in most African countries. Lagos is reported to have recently joined the ranks of the world’s megacities, which is Africa’s second after Cairo, while Kinshasa is also rapidly approaching mega city status.
Projections indicate that by 2030 Africa’s population will exceed that of Europe, South and North America combined. The actual realisation of such population distributions will depend on the rapidity of Africa’s infrastructure expansion to unlock sparsely populated areas, and its ability to create livelihood opportunities in these locales. Southern Africa, the most urbanised region in sub-Saharan Africa, is projected to reach an overall region wide urban majority around the end of the current decade. Africa’s urban transition is proceeding rapidly with the accumulated relative growth rate of its cities now among the highest in the world.
Between now and 2050, it is projected that the number of Africa’s urban dwellers is to increase from 400 million to 1.26 billion. Africa's urbanisation level is projected to increase by 50 percent around 2035 and may increase further to almost 58 percent by 2050. More specifically it is projected that by 2025 Africa’s ten largest cities will be classified as three megacities, those cities being Lagos, Cairo and Kinshasa. Dar es Salaam, Khartoum and Abidjan are likely to reach megacity status within a generation from now if current growth trends persist.
It is well published that African cities are burdened by high infrastructure deficits and shortages in access to technologies and services. To overcome the deficit the economies of scale in production, large markets for labour and goods, and the ease of information flows in urban environments may enhance productivity and innovation. Moreover, the density and diversity of cities can encourage the emergence of progressive values and institutions that promote social cohesion. Urbanisation could be a major driver of this.
Urbanisation is said to have progressed unevenly within African countries. While Lesotho has recorded a decline in urbanisation levels since 2001, other capital cities, such as Maputo and Luanda, have been experiencing construction booms linked to foreign investment and increased trade. Key tourist centres such as Cape Town, with distinctive urban niches in the world economy, have experienced growing prosperity. As with Cape Town, urbanisation in African cities is encouraging a growth within Africa's construction industries.
Property trends in South Africa's central business districts are being driven by rapidly changing urban lifestyles. City dwellers are generally spending less of their disposable income on their gardens, for example, and more on lifestyle oriented activities such as art and food markets, gym memberships, health services and eating out.
Urbanisation in Johannesburg has taken an innovative turn, which is seeing young professionals living and working in the Johannesburg city centre. It is said that a new breed of developers in Johannesburg are ushering in a new residential dimension that is turning past housing trends, of having a garden and a white picket fence, and transforming once shunned locations into trendy properties. Security considerations and the advent of disposable living are fuelling the new trends, which are attracting property investors and young home buyers into the inner city. Mixed use residential units located in the Johannesburg city centre no larger than 36 square metres are selling at a rapid rate.
Mixed use precincts such as Maboneng in the city centre, which have loft apartments on top and restaurants, food and art markets, retail stores, art galleries, gyms and tree lined walkways below are proving popular. The private sector has taken advantage of the current craze, which has given rise to investment opportunities in the inner city. Property developers taking advantage of this have had the foresight to purchase derelict buildings and refurbish them into stylish one and two bedroom loft apartments. Such developers have undoubtedly been instrumental in reshaping the inner city. One only has to look at the Maboneng Precinct where numerous buildings have been refurbished and transformed into trendy apartments such as Main Street Life, Revolution House, Artisan Lofts, Urban Fox and Rocket Factory. This has brought a significant proportion of younger and more educated people into the inner city.
The refurbishment of buildings into trendy apartments in the Johannesburg inner city, more often than not, means that the developer would need to open a sectional title register and have the sectional plans registered over existing space. From a legal perspective this would require that a conveyancer attending to the opening of the sectional title register to, simultaneously with the opening, ensure that the Registrar of Deeds issues the developer a certificate of registered sectional title in respect of each unit that have not been sold.
The law in South Africa that governs Maboneng Precinct developments set standard rules governing sectional title developments. However, the law allows a developer to add or change some of the standard rules. The rules governing Maboneng Precinct developments have been drafted and settled from a great deal of legal input in order to cater for the mix use nature of the developments. The rules cater for restaurants, food and art markets, retail stores, art galleries, gyms and tree lined walkways activities, which meant that the standard rules had to be changed.
Agents of change in Johannesburg may be attributed to the private sector and public private partnerships as well as civil society. For residents, the attraction is the cosmopolitan ambience, good security and the lock-up-and-go lifestyle. For investors, residential developments in the Johannesburg city centre offer opportunities such as tax incentives through the urban development zone. Through the urban development zone scheme, the South African government is incentivising investors to spend money on urban rejuvenation.
Should Africa's population exceed that of Europe, South and North America combined as projected then most African city centres will most probably be populated by young professionals who are inclined to spend their disposable income on lifestyle oriented activities. Being that the case, the current real estate trend in the Johannesburg city centre may well be a catalyst signalling what a typical African city may look like in 2050.
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