Pull up outside 77 Commissioner Street and a doorman in atop hat comes to greet you. For a moment you might think you’ve stepped outonto a Manhattan pavement, but this isCornerHouse in inner city Joburg, headquarters of property development company Urban Ocean.
The once grand edifice – built in 1904 tohouse Barney Barnato’s business concerns – is one of 20 buildings in thefinancial district of Johannesburg’s erstwhile decaying CBD that have beensnapped up by Alfonso Botha and Duan Coetzee. The two, Botha a developer andCoetzee a property marketer, formed Urban Ocean four years ago withthe aim of re-inventing the concept of inner city living in line with globaltrends.“We were fascinated by the challenge oftaking on urban renewal projects,” says Botha. “What others saw as a majorsocio-economic problem, we saw as an opportunity. We were not the first developers to move in,but we put a new spin on city development and that’s what has made our projectssuch a success.”
That new spin is about luxury andtop-quality building standards. To make an impact on the market, Urban Ocean’sfirst project had to be exceptional. It was, and the result was thatCornerHouse, comprising a limited number of apartments, a boutique hotel, arestaurant, and Urban Ocean’s offices, sold outin less than a week from its launch. Those first buyers have since been offeredprices that represent well over 100% return on investment. “Our customers arehappy,” says Botha. “We have created a lot of value for them.”But it wasn’t plain sailing. CornerHouse’stenants owed many months rent to its then owners – which they did not want topay – and they refused to move. Botha smoothed negotiations between the twoparties, making more than a thousand telephone calls to close the deal.
Urban Ocean’s projectsare mostly mixed use buildings, combining retail and residential. They areaimed at business tourists and people who work in the city. Prices range fromR495 000 to R20 million.“Public transport remains a problem in Johannesburg and peopleare becoming more prepared to pay a premium for living close to work. When youconsider that traffic is worsening every month, it’s not difficult to see why,”says Botha.He acknowledges that he expected far moreresistance from the market. “We are now a year ahead of schedule in terms ofour business plan,” he adds.
Like most South African entrepreneurs,Botha and Coetzee invested their own money in the first couple of buildingsthey bought. “The negative perceptions of the city worked in our favour;building owners were initially only too keen to get rid of their property. Butonce interest was sparked and prices rose, we had to look at more creative waysof financing the projects and attracting venture capitalists and outsideinvestors. Our first few successes stood us in good stead.”Urban Ocean’s successhas given rise to competitors, but Botha views competition as his strongestasset. “Our competitors have helped to create value for us.” When asked why Urban Oceanmanaged to make a success of an initiative that many corporate property ownersshunned, Botha puts it down to entrepreneurial versus institutional thinking.
“Companies with too much money at theirdisposal are not always able to think creatively. Entrepreneurs have to be ableto do a lot with the little they have. This makes them more inventive.”A concern that is repeatedly raised issecurity. Botha says the sense of community created by apartment living is thebest form of security. “In the suburbs, people live isolated lives. The richeryou are, the higher your wall, the more difficult it is for anyone to help you.In high-density areas the sense of community is far greater. In addition, allour developments have security guards as well as CCTV and other securitytechnology. Shops are within walking distance and entertainment and night lifeare next on the cards.”
The biggest challenge has been getting allservices and utilities to function. The company has had to work with themunicipality to tackle the culture of dirtiness that permeates the city. “Wehad all graffiti removed from the areas around our buildings, and we employadditional cleaners to support the city’s services. There is no doubt thatcleanliness helps to combat crime and uplift a district.”This co-operation, he adds, is leading to achange in mindset about the city. “Banks and other businesses, as well as thecity council, are all doing their best to improve the surroundings.”His ultimate aim: to help turn Johannesburg into a world-class city that isa tourist destination as well as a business, residential and leisure hub.