R5-billion-worth of investment has been poured into the regeneration of Johannesburg’s inner city over the past four years — a result of the Urban Development Zone (UDZ) tax incentive, which has now been extended by a further five years.
“Urban-renewal tax incentives are critical to economic growth and turnaround, as the inner city’s redevelopment has shown. It is a success story in the City of Jo’burg’s regeneration plan,” said councillor Parks Tau, member of the mayoral committee responsible for finance and economic development for the Johannesburg city council.
The extension of the tax incentive’s sunset until 2014 gives inner-city investors time to secure maximum benefit from the incentive.
For example, the first buyer of a newly constructed building in the inner city qualifies for depreciation of 55% of the purchase price, depreciated at 20% in the first year and 5% in the subsequent 16 years.
The first buyer of a renovated or refurbished building in the inner city qualifies for depreciation of 30% of the purchase price, depreciated at 20% a year for a five-year period.
All inner-city buildings under this incentive must be used to generate income, ranging from rental accommodation to manufacturing and business.
“The incentive now includes sectional title and shared ownership, as well as first buyers of new or renovated/refurbished buildings,” said Lebo Ramoreboli, programme manager for the inner city and CBD’s economic development.
The combined effect of the new offerings and the inner city’s property rush is attracting a new wave of investors who have contributed to the rebirth of the area over the past four years.
The presence of blue-chip tenants such as AngloGold Ashanti — the current tenants of Tiber Group’s new development, Turbine Square — shows confidence in the area’s future.
AngloGold Ashanti has its roots in the inner city and its move to Turbine Square in May last year is testament to its continued commitment, said Mark Cutifani, AngloGold Ashanti CEO.
“Turbine Square is an innovative and functional building that should help to enhance positive change in the Newtown and inner-city area,” he said. “Our hope is that this development will help to drive and encourage similar developments within the inner city.”
The UDZ spans 1 800ha and includes the traditional CBD, Joubert Park, Marshalltown, Braamfontein, Newtown, Fordsburg, Bellevue, Yeoville, Berea, Hillbrow, Troyeville, Bertrams and Doornfontein. — I-Net Bridge