E-tolls help property developers defy trends MyZA

Despite a PricewaterhouseCoopers (PwC) report this month pointing towards an ailing South African construction industry, a few developers, such as Johannesburg-based Krisp Properties, have astounded investors by defying the trend.

Krisp’s portfolio has been boosted in 2013 by the increased interest in Johannesburg’s planned OR Tambo Aerotropolis, with high profile companies such as Michelin SA moving its headquarters to Krisp’s state-of-the-art R500-million Clearwater Office Park across the road from the aerotropolis.
Meanwhile, the implementation of e-tolls in Johannesburg has seen the company’s planned 9,000m² neighbourhood shopping centre and 114 residential unit development along the R55 (12 hectares of land called Olievenhoutbos Ext 47) – a popular new alternate route for motorists avoiding e-tolling – substantially gain in value.

Krisp Properties executive director Jordan Mann said the company had fared very well despite the challenging economic conditions highlighted in the recent PwC SA Construction Survey, and was looking forward to even better growth in 2014.

“We have found that there is increasing demand for top-class developments whose location has been carefully plotted and which have cutting-edge design and finishes,” said Mann.

Michelin SA moved its 120-strong staff compliment into the new AAA-grade purpose-built headquarters at Clearwater Office Park earlier this month. The new headquarters was convenient for staff, said Michelin, because of the lifestyle amenities such as a restaurant, gym and tennis courts available at the office park. But the proximity to the aerotropolis was also a major draw card, it said.

It joined other tenants at the 20,000m² (GLA) office park, including Discovery Health, Old Mutual, ABSA Bank and Imperial Air Cargo. Given the demand, Mann said the company was already planning a third phase: 28,000m² of additional office space set for development in the second half of next year.

In Cape Town, Krisp’s 5,000m² pedestrianized shopping centre alongside the busy Langa train station also received the green light earlier this year.

“The railway has been upgraded and is in fact a First World station. Langa Junction is a very nice fit for the station itself,” said Mann, adding that he hoped to have the centre completed by the second half of next year [2014].

The approval comes alongside plans by the City of Cape Town to invest in pedestrianizing the area with paving and landscaping the station forecourt and access roads.

“Given the strong demand for our developments this year, we are anticipating solid growth during 2014 as the construction industry begins to recover along with the economy, and as many of our developments begin to come to fruition,” said Mann.

Krisp Properties is also the latest high-end developer to invest in the increasingly sought-after light industrial space between Johannesburg and Pretoria, which has seen a host of established companies flocking to a new light industrial hub in Olifantsfontein, between Johannesburg and Pretoria and 20 minutes from OR Tambo International Airport.

Due to the high demand for industrial space, Mann said, Krisp was developing a “safe light industrial space in the area”. The company is in the advanced stages of developing the Olifantsfontein Industrial Park along Olifantsfontein Road.

The company already boasts successes which include Randburg Office Park, Ebony Park Shopping Centre in Midrand and Sandton Office Park.

Krisp’s planned Olive Wood Shopping Centre in Olievenhoutbos, along the R55 in Johannesburg which is increasingly being used as an alternate route to the e-tolled highways.