Befriend the Trend:
most promising property trends at the moment is being dubbed “repurposing” and it may offer some interesting opportunities for investors with a little appetite for risk.
Johannesburg-based property development firm Citiq is one of a growing number of companies that repurpose existing structures i nto residential structures. The company is in the process of converting the Newtown Silos, constructed in the Sixties and in disuse since the Eighties, into accommodation for 320 students.
According to Arthur Blake, the engineering mastermind behind the project, providing accommodation that is conveniently situated, close to work and amenities, secure, functional and wellmaintained, is becoming increasingly difficult and expensive.
“Most of the so- called affordable housing in South Africa has been built on the urban fringe where land is cheap and the size of developments allows developers to build at low cost due to economies of scale.”
By contrast, properties within city limits are extremely expensive to develop due to high land prices and limited space. Renovating and regenerating existing structures into office parks or accommodation can be achieved at between 60% and 70% of the cost of a new structure.
“Existing buildings built for other purposes, such as offices, industrial space and grain silos, often outlive their usefulness for their original purpose, which provides great opportunities to convert these structures into residential accommodation,” says Blake.
“By repurposing an existing building, the purchaser is able to buy a building, which is conveniently situated in the city centre, with pre-existing walls, floors and windows at a fraction of the cost of building a structure of similar size,” he explains.
For example, had Citiq company purchased the land, demolished the existing structure and rebuilt a structure with the capacity to house 320 people, the Newtown Silo project would have cost R59m, or R13 111 per square metre. By repurposing the existing structure, however, the