Modderfontein the future 'New York' of Africa

By
Font size: Decrease font Enlarge font
Artist impressions of the future development of the Modderfontein property in north-eastern Johannesburg. Shanghai Zendai Property says it plans to transform the area into a "New York of Africa" with R80bn investments over the next 15 years, Artist impressions of the future development of the Modderfontein property in north-eastern Johannesburg. Shanghai Zendai Property says it plans to transform the area into a "New York of Africa" with R80bn investments over the next 15 years,

Modderfontein - It is in this suburb of Johannesburg that the Chinese Shanghai Zendai Property decided to invest.

For R1 billion, Shanghai Zendai Property has acquired a plot of 1,600 hectares from the South African company AECI explosives and chemicals group.

With this piece of land, the Chinese organization plans to build "a financial hub" with residential, commercial, light industrial and retail components.

It aims to transform the Modderfontein property, into a "New York of Africa" with investments of R80 billion over the next 15 years.

Meanwhile Gauteng Premier, Nomvula Mokonyane is optimistic that the deal struck will spur job creation and enhance economic activity in the province.

"We are thankful that Shanghai Zendai chose to bring its business to Gauteng and assure the investors that we, as the Gauteng provincial government, will continue to work with them to ensure that their vision of building a major business and tourism hub becomes a reality," she said.

The outcome of the property deal has boosted investor confidence in South Africa's Commercial Property Sector.

The new billionaire in town is a maverick, a visionary, an art collector and businessman.

And it is likely these qualities that led Dai Zhikang, founder and chairperson of the Shanghai Zendai group, to commit to investing tens of billions in a development in Modderfontein — a move which is not only a vote of confidence in the country, but is set to change the face of Johannesburg.

The transaction makes it one of the largest single foreign direct investments in South Africa: in a recent report, Goldman Sachs said South Africa has attracted an annual average foreign direct investment of R19-billion over the past two decades.

The company has completed more than one million square metres of development, listed on the Hong Kong stock exchange in 2002 and now has an estimated market capitalisation of $300-million. Dai has a 39% shareholding.

Austerity measures, in the form of property purchase restrictions, enforced by the Chinese government in a bid to slow down rising property prices, caused the company to look outside of its own country for growth, Shanghai Zendai said in a notice detailing the South African acquisition.

The lush 1 600-hectare site in Modderfontein, owned by AECI since 1896, is home to little more than overgrown vegetation and wetlands, through which cyclists are apt to enjoy the odd weekend trail.

It has obvious advantages as it is on the Gautrain route and located between the central business district of Sandton and OR Tambo International Airport.

The first deadline for the transfer of the property is July 2014. From Shanghai Zendai's side, there is a payment guarantee from the Bank of China in South Africa and, for AECI, performance guarantees from Standard Bank.

Shanghai Zendai's vision for the land is to make it a future centre of Johannesburg.

It will have seven focus sectors: finance and trade; an industrial zone for light industry such as warehousing and manufacturing; a convention centre; an African heritage theme park; facilities for education, training, sports and recreation; and up to 35 000 families living on the property.


NEWSLETTER — GET THE LATEST NEWS IN YOUR INBOX. SIGN UP RIGHT HERE.


Enter your e-mail address below using Lowercase.