Africrest Properties aims to manage 2,000 apartments by the end of next year
The private developer wants to double its assets under management and is drawing on inner-city demand
Investec Bank’s original head office is being redeveloped into a residential building called the Leo as private group Africrest Properties continues with its aim of doubling its apartments portfolio by the end of 2020.
Africrest, which converts offices into residential properties, is one of a number of property development companies that is trying to provide affordable and middle-income housing in Johannesburg’s inner city.
The company manages 1,000 apartments and plans to have 2,000 under management by the end of 2020. Its residential portfolio is worth R450m.
The City of Johannesburg is trying to lure the private-sector back to the inner city, which many companies left in the 1990s. It has implemented a policy which says that 30% of all the units in new residential developments in SA must be priced and designed to be affordable. These tend to be smaller units which have a rental cap of R2,100 a month.
Africrest director Grant Friedman said the company wanted a residential place that will appeal to both the surburbs and the inner city, which it had achieved through the Leo building.
“We have created a product which can work anywhere in Gauteng. It is well priced and offers high-quality finishes instead of it being a standard revamped inner-city building,” he said.
The building, which includes 15,000m² of office space, was sold several times over the years and had fallen into a state of disrepair, Friedman said.
The Leo is not one of the new 24 housing redevelopments which city mayor Herman Mashaba launched on Monday. He said the city had released 86 buildings, which would be redeveloped in a project worth R20bn.
It has been redeveloped into bachelor, one and two-bedroom apartments. It lies between the Absa and Maboneng precincts, two portions of the inner city which have recently received investment.
The apartments will be rented out at rates that range from R1,900 to R5,500 a month. Africrest formed a joint venture with the owners of the building and completed phase one which consists of 232 apartments. Phase two is set to begin in May and will consist of an additional 260 apartments.
The project has created about 110 construction worker jobs. It includes parking and drop-off areas for Uber Eats and other taxi services.
Friedman said he hoped that other companies would also develop new housing or redevelop old offices in the inner city into high-quality residential projects. This was despite the large security costs which developers had to cover in the inner city.
“Our security costs are triple here compared with what we have built in Bramley and Randburg,” Friedman said.
The Leo redevelopment will be completed in September.