Ferial Haffajee and Mukoni T Ratshitanga
The African National Congress appears set to take a whopping loss on its Shell House headquarters, which it will vacate at the end of September.
In a depressed property market, brokers suggest the 22-floor building could go for half of the R20-million the ANC paid for it in 1990.
Financial success is also unlikely should the party decide to rent out the building, which is situated in one of the most decrepit parts of Johannesburg. Ironically, the ANC’s move out of Shell House is part of a plan aimed at cutting its running costs by half. Prime locations in safer and more prosperous parts of Johannesburg languish without tenants in a city where 20% of available office space is vacant.
Last week, the ANC, which has cut back almost one in five staffers, announced that it would leave the building by October 1. It has not yet decided whether to sell or lease out the building. “Rentals are low and property values are low,” says Stan Arenson of the property company, Richard Ellis.
That’s true of the entire CBD, but even more so of the downtown area the ANC chose to buy in seven years ago. Johannesburg’s financial heartland -situated on the opposite side of town-has attracted new developments, but Shell House is situated in an area where theft is high.
The Plein Street building is bordered by Joubert Park, where many of the city’s homeless live, and a huge taxi rank. “If Shell House were more modern and situated in Rosebank it would be prime,” said a property consultant, adding that it would be difficult to rent an empty building as investors preferred full occupancy in order to earn revenue from rent.
The building also needs a lot of work. ANC spokesman Ronnie Mamoepa acknowledged that it needs “refurbishing” before the ANC can dispose of it. But it remains unclear where the cash-strapped party will find the funds for such an overhaul -it must also pay for an expensive December congress and begin thinking of 1999 election campaign.
Ironically the party has fallen victim to the more open economic policies it put in place. The relaxation of exchange controls means that property has lost some of its attraction as a safe and lucrative investment. Instead, many investors choose to invest in global funds.