LOOKING AT MABONENG

Though portions of the inner-city precinct are to be auctioned off, there is renewed hope for the project now that players with big balance sheets have become involved

Afew years ago, Maboneng was the place to see and be seen if you were part of Joburg’s hipster set. The inner-city precinct — an ambitious plan to save the city from urban decay — was a hive of activity.

It started with Arts on Main, an open-air creative hub that offered Ethiopian fare, craft beer, limited-edition skirts for sale and artworks from around Africa. Then came the entertainment spots: the Bioscope independent cinema, Pata Pata restaurant and, later, Argentine steakhouse Che. On the back of an uptick in tourism, courtesy of the 2010 Soccer World Cup, a backpackers’ establishment opened its doors. In time, the top floor of the 12 Decades Hotel became a venue of choice for trendy soirées. With fresh fruit-and-veg sellers on the street, and barbers and other small businesses lining the roadways, it was reminiscent of London’s Portobello market.

Come April 15, however, Maboneng will go under the hammer. About 20 properties — as well as parts of properties — are up for auction. Experts say the auction will affect less than 10% of Maboneng, which itself is valued at R3bn. But properties at the precinct’s heart will be put up for sale: Arts on Main; the Bioscope; 64-room hotel/ apartment development Hallmark House; and parts of Drivelines’ residential container development.

Maboneng is the creation of Durbanborn entrepreneur Jonathan Liebmann — a realisation of his vision for a “place of light” among the dilapidated buildings of one of Joburg’s inner-city slums. Under the auspices of his company, Propertuity, he aimed to draw professionals and businesses back downtown after an exodus to safer northern suburbs in the late 1980s.

From the outset, Propertuity provided private security for the precinct in the hope that it would draw middle-class and affluent South Africans and tourists to visit and live within its confines. The company even provided a private shuttle service for residents to create a sense of safety and to encourage an influx of visitors.

But Liebmann says the scheme didn’t have the resources — or support from the

City of Joburg — to grow aggressively and sustainably.

In October last year, Propertuity was put into liquidation.

It’s difficult to blame Propertuity’s failure on any one reason. Residents, for example, suggest a lack of managerial skill and experience. But there’s also the fact that Maboneng was, by its nature, a closed-off entity, separated from the reality of life in inner-city Joburg. At R400,000-R2M, apartments were priced beyond the reach of many of those working closest to the precinct and failed to draw substantial demand. And Liebmann’s shuttle system didn’t serve those outside the precinct. (He said in 2013 that extending the service would be expensive and risky.)

For Francois Viruly, associate professor in the University of Cape Town’s real estate research unit, it made sense for Propertuity to focus its services on a small, controlled space because mixed-use developments can prove difficult for small players.

“Maboneng got quite big and it became tough to manage,” he says.

But market segment also played a role. “In SA, mixed-use developments tend to be geared towards the upper [end of the] market,” Viruly says. “Take a look at Melrose Arch: it contains some of the country’s fanciest offices and luxury apartments, and it’s backed by institutional money.”

That’s not to say there isn’t a case to be made for mixed-use inner-city developments that are a cut below the likes of Melrose Arch. But the problem for Maboneng, in Viruly’s opinion, was that it was too reliant on shoppers and tourists, but didn’t have quite enough on offer to draw the number and variety of visitors it needed. Moreover, the precinct needed a few anchor tenants — in the form of established retailers such as Woolworths or Pick n Pay — to build density in the area.

According to property economist Erwin Rode, one of the difficulties facing developers is that “resurrecting precincts that are effectively slums is not for the faint-hearted; the down-side risk is huge”.

It’s a sentiment echoed by Viruly, who says it’s hard to cite examples of revitalised