Divercity’s Absa Tower deal to inject new life into Jozi

The Divercity inner-city renewal project got a shot in the arm with the endorsement of Johannesburg mayor Herman Mashaba and the city council recently. Carel Kleynhans of iThemba, Atterbury’s partner together with Talis Holdings in the Divercity Urban Property Fund, gives us more insight.

Divercity announced a R2-billion investment in the redevelopment of Joburg’s inner city. We looked at the Jewel City part of the project recently; but tell us about the Absa Towers redevelopment, which was just announced. How did Divercity manage to acquire this landmark property?

CK: Absa put the Towers Main building out to tender as part of their plan to rejuvenate their inner-city campus. Following a competitive bidding process, Divercity was able to acquire the building from Absa and will redevelop the building into a one-of-a-kind mixed-use building at the heart of the Absa precinct.

What was it that put this building specifically in your sights for Divercity?

CK: Divercity invests in and develops mixed-use, amenity-rich inner-city neighbourhoods. The redevelopment of the Towers Main building presents a unique opportunity to create a one-of-a-kind building that contains all of the amenities and uses that we would usually like to see in a neighbourhood in one building. Apart from that, Absa Towers Main is also an iconic part of the Johannesburg skyline and we are proud to be able to give it a new lease of life.

What is the building currently used for?

CK: The building has been unoccupied and mothballed since it was stripped in 2013 in preparation for a renovation which never materialised.

Can you give us details about what is being envisaged for its redevelopment?

CK: The ground floor and plaza outside the building will be completely redeveloped with new public open space, a coffee shop, childcare facilities, an Absa branch and the new home of the Absa Gallery. Floors one to nine will then be leased back by Absa as office space, with the remaining floors 10 to 29 being converted into 520 new apartments. On floor 15 there will be a clubhouse for the residents as well as a “sky restaurant” that will be accessible to the public.

What is the distance between Absa Towers and Jewel City? Will the two spaces be connected in some way?

CK: They are only four street blocks or less than five minutes’ walk apart. We are currently working with the Johannesburg Development Agency to create a pedestrianised street that links the two and acts as a linear park for the surrounding neighbourhood. We believe this will have a big impact on the surrounding area.

When will the redevelopment start and what is the timeline for completion?

CK: Construction will kick off early next year, and Absa’s lease commences early 2020. The residential part of the building will open up in phases from January 2020 until mid-2020.

Having the city council and the mayor’s buy-in is a major achievement. What was the feedback from Mr Mashaba?  What is the city council’s role in this whole project going forward? 

CK: The City of Johannesburg (COJ) has been immensely supportive of the investment that Divercity is making in the inner city, and support is instrumental to the successful delivery of these projects. From our engagements with the COJ as well as other inner-city stakeholders, it is clear that people realise the value of these projects to the revitalisation of the inner city and as such we have received a lot of support in getting them to where they are now.

In your opinion, what does the acquisition of Absa towers for the Divercity project mean for Johannesburg? How will this change the inner city?

CK: Absa Towers Main is an iconic and very visible building, and we hope that its redevelopment will inspire other developers and investors to get involved in the revitalisation of the inner city. With our investment in Towers Main and Jewel City, we believe we are laying the cornerstones for the emergence of a vibrant, safe and liveable new inner-city neighbourhood.

What are the next steps?

CK: We are currently out on tender for the main contracts of both Towers Main as well as Jewel City, and will commence with construction on both in the coming months. While they are under construction, we are already looking for the next opportunities to invest in neighbourhood scale revitalisation projects, and look forward to sharing these with you soon!