Monday, September 6, 2010

David Dworcan

 

Long term investment


David Dworcan on inner city renewal and putting the sparkle back into the City of Gold


Decentralisation of the city, and the resulting inner city decay that arises from this, is certainly not unique to Johannesburg. Like many affluent cities around the world, the City of Gold is following the global trend of trying to breathe new life into the CBD.

David Dworcan, a member of the Gauteng Master Builders Association , has been in the construction industry for over 15 years. He says that the future of the revival of the inner city lies in low cost housing. “Over the last two decades or so, the whole of Joburg has actually decentralised to Sandton, leaving a sort of a ghost town,” he explains.

“I love the architecture in town; it’s Georgian, Colonial, Victorian and Roman architecture from a bygone era,” says David passionately. “It’s unbelievable that people had that level of artisan to go and do the things that they did out of concrete. And now, what we’re left with is a massive and beautiful infrastructure, and in essence all we need to do is reclassify it. We’ve seen people taking the buildings that exist, like office buildings, and turning them into residential spaces. With the huge demand for low cost housing, it’s the obvious choice.” From housing comes logical opportunities in commerce, schooling, transport, etc. and hence a revitalisation of an urban inner centre.

So are these new residential spaces a success? Success, according to Dworcan, is a double-edged sword.

“There are many success stories, among them Afco Properties, Angus Properties and Jozi Housing, all of whom we supply to, but there have also been failures. People have had tenants who didn’t pay the rent and the owners couldn’t get them out and they couldn’t pay their rates and taxes. It all comes down to how well one can actually control it.”

There is risk involved in every investment, and Dworcan says that investing in property in town should most definitely be seen, and treated as, a long-term investment.

“I reckon that with the prices that are still available in town, you haven’t missed the boat yet,” he explains. “In terms of buying buildings, if you have a level investment that you can put into a building, it’s a good time to put it in now, but it’s more of a waiting game. You’re not going to put it in now and sell it straight away.”

A large factor to consider when investing in property in town is crime, but this is something that Dworcan points out has to change.

“If it doesn’t change, then where are we?” he asks. “Where are we as individuals and as supporters of Joburg? The government and the tenants have to put more effort into the crime situation. They’ve done it with Big Brother, inserting security cameras all over town, and the amount of crime they’ve prevented has been phenomenal but not enough.

“Now they need to focus on their policing. They’ve put in a brilliant IT infrastructure, but if you haven’t got the means to support it, then what are you actually achieving? And if that infrastructure does come into place, they are actually assisting you in increasing the value of your property, which is a win-win situation, because the better the increase in value on your property, the better they make on rates and taxes. So it all spirals upwards.”

Commitment from the government’s side to see the inner city being revived is evident in the tax relief measures they have offered inner city property owners. In 2003 the then Minister of Finance Trevor Manuel announced the Urban Renewal Tax Incentive, offering tax cuts to owners refurbishing existing buildings or constructing new ones in the inner city. This incentive was extended in 2006 to part or sectional title building owners.

This is most definitely a step in the right direction, and Dworcan is confident that the potential to turn the inner city around is there.

“We have an infrastructure called town that has decayed, but it can be revitalised in a matter of years, as long as people put the flowers and the seeds in, and start sprouting them up,” he explains. “Whether it’s going to happen to the extent that it should, I’m not sure. But what I do know is that it’s definitely not happening enough at the moment.”




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