The skyline of Sandton, Africa's financial hub and richest square mile, is set to change dramatically over the next few years as property developers plough billions into the node.
Liberty Group and Pareto, the owners of the Sandton City complex, have already started work on the R1.77 billion first-phase expansion and refurbishment of the centre, including the construction of an additional 30 000m2 of retail space.
But it is the planned second phase development of a proposed 85-storey office tower at the corner of Fifth Street and Rivonia Road - opposite the new Gautrain station - that will become the icon to the Sandton skyline.
If built to the planned height, it will usurp the 50-storey Carlton Centre as the tallest building in Africa.
However, competition for the honour of being the tallest skyscraper in Africa is fierce. A 58-storey five-star hotel in Addis Ababa in Ethiopia is reportedly being developed by the Guangdong Chuanhui Group and the 60-storey Gaddafi Tower is under construction in Dakar in Senegal.
The tallest building in the world is the Burj Dubai, which rises 828 metres from the desert in Dubai. The exact number of floors is not known because of its tapered top, but is believed to exceed 165 inhabitable floors.
Apart from Sandton City, a number of other major developments are planned for Sandton, including:
- The R3bn Mutual Place mixed-use office development by Old Mutual Investment Group Property Investments (OMIGPI);
- The R1.5bn Sandton Skye residential lifestyle development off Grayston Drive by a subsidiary of China Railway Group in a joint venture with Eagle Canyon Golf Estates;
- The R600 million, eight-storey Sandton Gate sectional title AAA-grade office development by Barrow Properties, JSE-listed Group Five and empowerment group Amabubesi on a site in West Street, between Rivonia Road and Catherine Street.
Maurice Mdolo, the chief operating officer of Liberty Properties, stressed this week that construction of the Liberty office tower would be kick-started by it hitting a certain level of occupancy.
Mdolo said the development would be tenant driven and it was already talking to a few prospective tenants.
"We are talking to one big tenant, who hopefully will enable us to meet the minimum requirement. Whether we have a double dip or triple dip in the economy is irrelevant because even if the economy is really booming, if we haven't got the tenants, we won't be able to start the project. We would love to have the tenants secured by the middle of next year," Mdolo said on Friday.
He said that with the completion of the Sandton Gautrain station, the node had become very important for business people and there was definite interest from tenants.
The first-phase expansion and refurbishment of Sandton City would be completed by November next year, but Mdolo could not comment on the cost of the office tower.
"Once we start talking to tenants, it will tell us what is feasible," he said.
Mdolo said although an iconic office tower was planned, providing about 80 000m2 of lettable space, it could "easily swing to 70 000m2 or 60 000m2".
The third phase comprises the development of four residential blocks on the fourth-level parking garage at the southern end of the complex.
Mdolo said the four residential blocks would provide about 700 flats but this could be reduced to 500 if there was demand for top-end units.
He said the master plan for the project had been presented to the City of Johannesburg and approved in principle, but it still had to finalise some town planning issues and go back to the council for final approval.
It was also having discussions with Eskom to ensure it had sufficient power for the future development.
Brent Wiltshire, OMIGPI's executive for property development, said Mutual Place was a multi-storey 120 000m2 mixed-use office development that would be developed on a site in Stella Road in Sandton, opposite the Gautrain station.
Wiltshire said that the project was perfectly positioned because it was surrounded by investment banks, financial institutions, upmarket retail centres and the JSE.
About 70 percent of the project would comprise office space but it would also have a gymnasium, retail and "very possibly" a hotel.
It is anticipated the first phase will be ready by 2014.
"It is proposed that the first major tenant will be Old Mutual, who will occupy up to 40 percent of the bulk potential," he said. "We are currently in discussions and finalising the brief with Old Mutual. We are working on the viability to enable construction to commence in the beginning of 2011."
Research conducted by OMIGPI revealed that the Sandton central business district tripled in size since the early 1990s and the vacancy rate for A-grade stock in the node was particularly low.
OMIGPI said key drivers of the further growth in the node included growth in Africa, the timing in terms of the property cycle and the opening of the Gautrain rapid rail system.