Johannesburg - As construction of the much- anticipated Gautrain rapid rail link gathers pace beneath the city of gold, developers are busy clearing ground at surface level for a series of property developments linked to the country's first high-speed train.
Already more than R4.2 billion has been committed to new developments around the R25 billion project's 10 stations. That figure is expected to increase dramatically once all phases of the project are completed by 2015.
The train will link the Johannesburg central business district (CBD) with Pretoria, passing through Rosebank, Sandton, Marlboro, Midrand, Centurion and Hatfield. A spur line will connect to OR Tambo International airport.
The construction project, which is costing R3 million a day, has increased investor confidence in the province. Developments around the stations range from premium hotels and office towers to retail, industrial and residential space.
While developers are upbeat about the long-term economic spin-offs that will come with the realisation of the Gautrain, the go-ahead has not yet been given on plans to build a proposed mixed-use development near Johannesburg station, the train's critical CBD terminus.
Paul Arnott, the senior development manger at the Johannesburg Development Agency, was non-committal about talk of a 3 000m² residential building earmarked for construction near the station.
"Any development needs to be passed by the council and at this stage nothing has been approved or discussed by the council," said Arnott.
Development at the Rosebank station will include the upgrading of the Zone, Firs and Galleria shopping centres, according to a draft document by Johannesburg's development planning and urban management department. The upgrade would consist of a 114 unit residential tower block, a five-star hotel, retail space and open public space.
The Firs and the Hyatt hotel are owned by Investec, which is a major developer of the area together with Old Mutual.
Lisa Thomas, Investec's marketing manager, said: "The Gautrain increased our interest in the property and we propose having our development completed by late 2009, well in time for the opening of the station."
She said the group acquired the properties two years ago with the intention of an upgrade and new developments. The revamped Firs complex would be designed within a pedestrian-orientated environment, within walking distance of the station in Oxford Road.
Sthembiso Mntungwa, the property development manager of the Johannesburg Property Company, said tenders would be issued for the construction of a 100 000m² mixed-use development in Sandton. The first phase of the development near the Mushroom Farm park was expected to be completed in two years.
And in Midrand, Old Mutual was going ahead with the construction of the R1 billion Zonki'Zizwe project near Grand Central Airport, which would consist of industrial and office properties.
Johannesburg authorities have projected that Gautrain-related construction activities would boost the provincial economy by more than 8 percent a year, and the project and associated developments would create 800 000 jobs in 2014.
The project would also speed up the city's urban renewal programmes and its integrated transport system structure, which would be improved to act as a feeder system for the Gautrain.
Marius Nadel, the acting manager of Tshwane metropolitan planning, said each of the three stations under the Tshwane Metro required special attention, with retail, residential and office developments.
Pretoria station would be the main station and encompass a wider spectrum of amenities like conference facilities and tourism-related infrastructure.
"The contract is very strict on what facilities must be completed when the train arrives, so right now we are going to focus on getting the station facilities, like parking and the structure, ready. The revamping of the existing station and improvement of links to the city centre is also very vital," said Nadel.
The Hatfield station, which would be located in the capital city's embassy and office precinct, was earmarked mainly for office and residential developments.
Prices of residential property within 3km of the stations have increased, according to a study conducted by Lightstone, a risk management company.
Andrew Watt, Lightstone's business development director, said new property developments would result in high-density living which could further fuel the proportion of activity around the Gautrain nodes.
"With all the investment in upgrading accommodation and infrastructure around the Gautrain stations, there has been much anecdotal evidence of increasing interest by investors in properties around the new stations," said Watt.
Lightstone's index showed last year's median price of a home within 2km of a station was R849 000. Between 2km and 3km the median was R760 000, compared with R625 000 for Johannesburg as a whole.
First National Bank property analyst John Loos said the planned new office blocks would help alleviate the current shortage of office space.
"These developments come at a time when Johannesburg is beginning to experience a scarcity of office blocks. I believe that the planned developments, together with the Gautrain, are going to boost the economic activity of the city," said Loos.
He believed that as the economy of Gauteng continued to grow, the office space and residential properties would sell well. "The long-term job creation of all these projects will have a positive impact in creating sustainable job opportunities," said Loos.
Andrew Golding of Pam Golding Properties said investors were keeping a close eye on areas in close proximity to the Gautrain stations.
"Areas of Johannesburg are being rezoned with a view to creating a density of housing; this will also impact enormously on the prices of existing properties," said Golding.
The station at OR Tambo International would give the airport a major facelift, help ease road congestion and create easy access to the main terminal. The airport station's first phase is due for completion in June.
The first phase of the rapid rail network connecting Sandton to the airport would be operational by May 2010. The second phase between Sandton and Hatfield will take a further nine months to complete.