When the Johannesburg Central Business District (CBD) went through a period of decay as investors and property owners fled the inner city, some saw an investment opportunity to cater to the changing demographics.
Traditionally, the inner city was predominantly a white area, and when SA became a democratic state the CBD demographics changed. Many who had invested left the CBD, businesses moved to the northern suburbs of Johannesburg including Sandton and Rosebank — and this contributed to the decay of the Johannesburg CBD. Criminal activity and homelessness increased, driven mainly by abandoned buildings, many of which were hijacked by criminals as the owners fled.
“As I watched the CBD fall apart, I had an idea of reviving it in line with the needs of inner-city dwellers, those transiting and working in the inner city,” Gerald Olitzki, founder and chair of the Olitzki Property Holdings (OPH), told Business Day.
One such project was revamping the Gandhi Square precinct, the former Van der Bijl Square and Government Square, and the site of the city’s first courthouse. Named after the political activist Mahatma Gandhi, the precinct was at the time a crime hotspot and inhabited by homeless people.
OPH owns one of the city’s oldest heritage properties — the high court building built in 1904 to provide office space for lawyers who practised at the adjacent magistrate’s court at Gandhi Square. The company restored the building in 2018 and kept some of its heritage. It is now a small- and medium-enterprises hub offering 36 A-grade office suites priced from R2,500 a month.
An attorney by profession, Olitzki developed this idea while working as an articled clerk in the area. He witnessed the transformation from a clean and safe environment into a criminal den. Olitzki recalls how women from his office would take off their jewellery if they needed to walk across the square.
OPH is a specialist commercial property company which has been investing in Marshalltown in the inner city of Johannesburg for more than three decades. The company operates on the south side of the city and owns office and retail properties on the Gandhi Square, Fox Street and Main Street precincts. These precincts are a main transit hub and are sought after for their prime offices and retail as well as restaurants and bars.
There are also key financial services precincts including the Standard Bank headquarters on Simmonds Street, the Absa precinct and FNB Bank City — all with traffic that leads to and passes through Gandhi Square.
Olitzki qualified as an attorney in 1977 and opened his law practice in the inner city a year later. He bought his first commercial building, Vusa House on Gandhi Square, for R1m in 1989. After the democratic elections, he approached the new city council management and proposed the idea of developing the decaying Van der Bijl Square as a catalyst to revive that part of the inner city.
Olitzki was aware that the council — though mandated to implement revival projects — didn’t have a budget. This was a perfect time to propose his long-standing idea to make Van der Bijl Square an attractive precinct and bring business back to the inner city. His proposal was cost-effective — they were inheriting obligations and, at the time, no tangible benefits. Olitzki was passionate about the inner city and wanted commuters and businesses to be safe.
“We asked that the area be declared a nontrading zone for informal traders and for a private lease over the bus terminus (Gandhi Square), giving us jurisdiction to control the area,” said Olitzki.
Olitzki said they initially asked for a 99-year lease but were eventually given 45 years. While he said he has always respected the economic contribution of informal traders, to successfully revive Gandhi Square, informal trading needed to go and the precinct needed enhanced security. Other property owners bought into this dream, and over the years these precincts are now prime areas south of the CBD.
He said Neil Fraser played an instrumental role in the success of the inner-city renewal initiatives. Fraser, who was executive director of the Central Johannesburg Partnership and who worked closely with Olitzki on the revival project, came across the concept of City Improvement Districts (CID) overseas.
With security being a focal point to the success of the revival project, the Johannesburg CBD was the first to have a CID followed by Cape Town. A CID is a nonprofit organisation operating within a defined geographic area where property owners agree to pay a levy for supplementary and complimentary services to enhance the physical and social environment of the area.
“When property owners were fleeing the city, I was picking up buildings at bargain prices and companies like Nedbank and Old Mutual, who sold their buildings at the time, are back as tenants in our portfolio,” he said.
In the early 2000s, Van der Bijl was renamed Gandhi Square — a thriving transit hub with retail and office buildings with 24-hour security. OPH then embarked on the revival projects of Fox Street and Main Street which became a hub for mining houses. OPH has bought the office building that was home to the Minerals Council of SA from the Chamber of Mines and will turn the property into modern offices.
Office and retail space is in demand due to high traffic volumes passing through these areas. At a time when many office users are reducing space, this part of the CBD is seeing many businesses returning. OPH recently acquired the former Standard Bank headquarters before the bank moved to the Simmonds Street building. This historic building measuring about 7,000m2 was built in 1908.
“The success of the revival projects brought businesses back to the CBD, and we have a lot of emerging businesses in our portfolio.”
In property, location, location and location are key considerations when investing. OPH has realised that after locality, building lobbies, loos and lifts (the 3Ls) are important to attract and retain tenants.
Olitzki said that by mid-2005, investors including City Property, the brainchild of the late Alec Wapnick, converted office buildings into affordable residential apartments in the north of the city. At the time, City Property had been busy with revival projects in the Pretoria CBD. Wapnick founded Octodec Investments, the largest single owner of properties in the Johannesburg and Tshwane CBDs.
The JSE-listed real estate investment trust owns a diversified portfolio of more than 260 residential, retail, office, industrial and specialised properties, including an equity-accounted joint venture valued at R11.3bn. The company contracted City Property Administration to perform its asset and property management functions.
He said Afhco, which provides affordable apartments and retail spaces, soon followed, thus turning the inner city into a live-work-play environment.
Initial revival projects heralded the era of the Maboneng Precinct, renewal projects in Braamfontein and Jewel City — all creating a lifestyle centred on security.
“Though some parts of the CBD are still experiencing decay, other areas are thriving and attracting many businesses due to their affordable rentals and secure environments,” said Olitzki.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.