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Tuesday Dec 17, 2013

Change of fortune for Joburg inner city

Joburg's inner city has come full circle since the flight of citizens and their capital began in the 1970s.

Remeds View in the Maboneng precinct.

Forty years later new people have moved in, money is flowing back and cultural precincts are springing up.

An example of this is the Maboneng Precinct on the eastern fringe of Joburg's central business district, in which Futuregrowth Asset Management and TUHF have agreed to provide a joint funding facility of R200 million, split 70:30, for development.

Futuregrowth Asset Management will be the primary funder in this partnership, but will use TUHF's management expertise and skills to oversee the building refurbishments and upgrades over the term of the funding.

The loan finance will yield a risk-adjusted return and has been structured so that the credit risk and performance of the investment will be carefully monitored.

The Maboneng Precinct includes residential, commercial and industrial buildings.

The developer is Propertuity Management (Pty) Ltd, which is jointly owned by Jonathan Liebmann, master mind of the precinct, and a trust held by a private equity partner.

Futuregrowth credit analyst Paul Semple says the Maboneng development initiative offers a good investment opportunity for the firm's clients.

'We've seen demand and increased investment fuelling the growth of inner cities.

'The buildings in the area are zoned light industrial but are mostly in a state of disrepair.

'Liebmann and architect Enrico Daffanchio have used creative architectural solutions to optimise the significant bulk and volume in the buildings, resulting in a distinctive cultural area with a mix of galleries, artist studios, creative venues, offices, small retail shops, and affordable and upper-income residential units.'

For TUHF, which has financed about 18 000 low-cost housing units in inner cities, the development offers further opportunities for rejuvenating the city centre.

TUHF's group mortgage manager, Roselyn Valloo, says the company prides itself on its market knowledge.

'Affordable housing is in demand in the city - but there are other markets: young, sophisticated, urban professionals are attracted by the vibrant energy and buzz of these new neighbourhoods that are redefining the dynamics of the city.'

Propertuity's chief executive, Liebmann, says: 'Our philosophy is to create diverse offerings in the neighbourhood as well as provide an opportunity for entrepreneurs to start new businesses, which in turn would generate more employment.

'Today Maboneng is a successful, bustling urban community, with seven commercial and residential developments. It is also home to more than 20 businesses.'

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