Gauteng generates 33,9% of South Africa’s GDP, representing 10% of the total GDP for the entire African continent. The Gauteng economy is thus the driving force behind the South African economy. Currently, the finance and business services sector continues to be the major contributor to the province (26%), followed by wholesale and retail trade, and the government sectors.
Given that Gauteng is the biggest regional economy, it has experienced a surge in urbanisation over the last 10 years. In all, 23% of the South African population (11,9 million people – StatsSA 2014) currently live in Gauteng. This number is set to grow by 5% by 2020. As a greater number of people move into the province, the requirement for land increases. Therefore, Gauteng has seen this expansionary growth during the last 10 years in its outlying urban areas to the extent that the metropolis of Johannesburg has created decentralised zones or outlying CBDs on the outskirts of the city. Areas such as Fourways, Modderfontein and Midrand have seen the creation of these decentralised zones. This provides opportunities for developers and property funds to create value.
Fourways is one such zone that has grown due to urbanisation and urban sprawl. The area of Fourways lies on the outskirts of the Johannesburg metropolis and sits on arterial routes into Sandton and Roodepoort. It has experienced considerable growth in residential dwellings over the last five years. This makes it a value proposition for Accelerate to create a decentralised CBD. It already owns 179 893 m2 of gross lettable area (GLA) within the node, but is currently adding to this with:
- the redevelopment of Fourways Mall. This development is aiming to be completed by 2018, and will add 90 000 m2 of retail GLA to the Fourways Precinct;
- the renovation of Cedar Square. Renovations have started on the shopping centre and are scheduled to be completed by the end of 2016. These renovations include: an expansion of the Woolworths foods store, completion of the front facade, and other upgrades; and
- other opportunities to expand and improve on its assets within the Fourways area.
Accelerate owns undeveloped bulk in the Fourways Precinct, which it will use to create more value for shareholders. The bulk includes:
- the area surrounding the BMW dealership on Cedar Road;
- the area behind the Buzz Shopping Centre; and
- bulk around Cedar Square Shopping Centre.
Accelerate will look to create more bulk in this node in the future.