Six city blocks of the seedier side fo the Johannesburg CBD and the iconic Absa towers main building will be redeveloped at a cost of R2 billion to create a new urban precinct, Divercity Urban Property Fund announced on Wednesday.
The massive development will see a rejuvenated Jewel City, once the heart of the diamond and precious metals trade in Johannesburg, with new amenities such as a school, clinic, gym and retail stores.
Jewel City abuts the gentrified Maboneng Precint, as well as areas better known for abandoned and "hijacked" buildings.
Divercity is expected to spend up to R1.2 billion on the development situated on the intersection of Fox Street and Joe Slovo Drive, releasing 2,200 apartments to the market in two phases.
The Absa tower itself will undergo an R400 million redevelopment with the introduction of 520 affordably priced residential rental apartments, retail space and a public park.
Nine floors of the 30-story building will be rented by Absa once renovations have been completed in 2020.
A pedestrian walkway with public art and lighting installations will connect the Absa tower to Jewel City, roughly 650m away.
Construction on the development is expected to start in early 2019.
City of Johannesburg mayor Herman Mashaba hailed the development as the “the largest in the Johannesburg CBD for some years.”
“The investment is an indication of investor’s renewed confidence in the potential held within the inner city,” Mashaba said in a statement.
The recently launched Divercity is backed by local developers such as the Atterbury Group, Talis Property Holdings, and Propertuity Developments.
Divercity counts Rand Merchant Holdings and Nedbank Property as its investment partners.
It launched with a R2 billion portfolio earlier this year, which is set to double once the development is concluded.
Ownership of Jewel City was transferred from Redefine Properties to Diversity at the beginning of October.
It acquired Absa Towers Main through a competitive bidding process, conditional on approvals from the Competition Commission.
Wouter de Vos, CEO of Atterbury Property Fund, said the Absa tower development, and Jewel City is symbolic of what Divercity aims to do in urban centres across South Africa.
“[Divercity] is set to renew and re-energise the country’s urban centres with its unique focus on inner-city precinct development that combines commercial buildings with affordable residential space to create inclusive and diverse neighbourhoods,” De Vos said in a statement.
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