Evolving Into Smart Cities

Redefining Sustainable Urban Development

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Some of South Africa’s biggest mixed-use developments are evolving into smart cities by embracing the latest technology, as the Cape Town CBD continues to enjoy cutting-edge new developments that have facelifted the once-grim inner city.

Beyond the new urbanism trend—where all daily requirements are within easy reach in walkable precincts—new developments are targeting Millennial investors with “smart” features that make a smart city.

Think electric car charging stations, precinct-wide Wi-Fi and Fibre-to-the-Home, significantly enhanced 24-hour security and assistance in your home for a range of emergencies—at the push of a button. This is the future of development.

What are millennial buyers looking for? Social commentator, Mal Fletcher says, “Millennials expect to create a better future, using the collaborative power of digital technology.”

“Technology is an integral accompaniment to new urbanism as it holds the desirable characteristics of walkable precincts, where residential and office space are combined with gyms, hotels and a wide variety of upmarket, cocktail bars and restaurants,” shares Nicholas Stopforth, the Managing Director of Amdec Property Development.

Increasingly, people want to live, work and play in the same place—a space where they can easily and safely walk to an office, home, restaurant or another amenity. This concept is a mixed-use precinct. When combined with the latest in technology, it becomes a smart city.

And while a smart city has all the latest technological security and lifestyle benefits, these are designed into the development, so are largely unseen. You won’t find high-rise tower blocks with unsightly satellite dishes adorning the façade. Instead, imagine buildings that offer green design, green spaces and pedestrianised roads, yet harken back to a feel of traditional, communal village life where all your daily needs are within walking distance.

It might sound contradictory but it’s not.

State of the art

However, more than just focussing on technology, smart cities are focused on sustainability. And in South Africa, these mixed-use, new urbanist precincts are certainly driving the sustainability trend.The world over, developers are under pressure to drastically minimise water usage and incorporate eco-friendly technologies that will benefit the planet in the long term. “Residents and investors want to know what is being done to reduce the impact on the environment,” says Stopforth.

Sustainability is a key focus area, with green building initiatives including refuse recycling, water-saving devices, low-energy LED lighting and rainwater harvesting. With water scarcity being the new normal for the city, developers are required to implement water-wise strategies from the ground up.

This has resulted in a shift towards water-conscious design and planning—like rainwater and greywater harvesting, dual-flush plumbing systems and water storage facilities. The company will also be investigating the viability of installing an on-site desalination plant to take advantage of the abundant groundwater available in the foreshore area.

“There is a huge benefit to executing water-saving measures at the construction stage, rather than retrofitting. Not only is it better to have systems in place at the start, but it saves money in the long run. Ultimately, we need to reduce our impact. A smart development needs to be smart about sustaining our future,” Stopforth explains.

Cape Town is booming

“Cape Town is booming, especially the foreshore area and the Roggebaai Canal precinct where the Yacht Club is located,” says Stopforth. Amdec’s other Cape Town development, Harbour Arch, has achieved over R1.2-billion in sales, with 80% of its 432 units sold within five months of launching. It will be the first and largest mixed-use development of its kind in Cape Town’s CBD—with six individual towers over 5.8 hectares.

“The development includes two Marriott hotels, with construction due to commence before the end of the year. It is clear that our new urban developments have a hugely positive impact on the economy too, driving job creation in the construction, hospitality and retail sectors,” Stopforth says.

To find out more about the state of the property development industry, Greg Simpson caught up with Stopforth’s learned colleague, James Wilson, the CEO of Amdec in Cape Town. Some of his prestigious past projects include Melrose Arch in Johannesburg, Val de Vie and Pearl Valley in the Cape Winelands to name a few.

Where did the inspiration for the Harbour Arch development come from?

The inspiration comes from Melrose Arch in Johannesburg, which we’ve owned for 15 years. I’m a Capetonian, I’m obviously delighted to be involved in Melrose Arch but there was a bit of a disconnect that I live in Cape Town and I have this magnificent development in Johannesburg, so I wanted to bring Melrose Arch to Cape Town, hence the name Harbour Arch.

The location on the Foreshore is very central and it will be prominent in city’s skyline.

Yes, we’ve owned that site where Harbour Arch is going to be based for five years now. As you point out, it’s a great site, with multiple entry points into the city and it’s got magnificent views to the one side of Table Mountain and to the other side of Table Bay, so it’s quite a unique site and it will really become a bookend to the southern side of the Cape Town CBD.

Green buildings are the talk of the town, what new technologies will you employ?

We are founding members of the Green Building Council of South Africa. At Melrose Arch, we’ve put sustainability into everything we’ve done, way before it was in vogue to consider sustainable initiatives. At Harbour Arch, we will continue that drive to make sure that everything we do is sustainable. There are many energy-saving initiatives, LED lighting, double-glazed windows, and we are looking at every form that we possibly can to recycle water to make use of greywater systems.

We’re looking at underground water that flows down from Table Mountain and that will pass through our basement. We’re ascertaining how we can capture that water and put it into some form of reservoir system on our premises and then recycle it back into the building. We’re looking at every single thing we possibly can to create a highly sustainable precinct and given the experience we’ve had at Melrose Arch and the fact that Harbour Arch is a precinct itself, we’re very confident that we can do many things that would not be financially viable in a standalone building.

What do you expect the economic footprint of the development to be?

It’s a mixed-use new urban development we’re putting in place, there will be a substantial amount of lifestyle retail and convenience retail, which will not only be available to the residents of Harbour Arch but to the broader Cape Town CBD. We want to welcome every resident and every office worker who is based in the city to come to Harbour Arch and use the gym, visit the cocktail bars and the restaurants and use the convenient shopping and hotel facilities. It’s going to be a great initiative for the city.

As a leader in property development in South Africa, what have been some of the keys to your success?

We’ve tried to deliver a good, quality product and great services to a large number of very loyal consumers and clients over a protracted period of time.

We’ve been in business for 28 years now and try to keep things simple. We try to look at what’s taking place in rest of the world to make sure we bring those great initiatives back to South Africa, and do it the South African way. We only ever employ local professionals, local architects, local structural engineers, we think they’re the best in South Africa and can deliver international products to Cape Town.

When jobs are still thin on the ground, large new developments must be excellent for the local construction industry?

Yes, absolutely. With the first tower alone we’re creating 2 500 jobs. Of course, they will be cyclical for the three-year construction period and then beyond that, the retail lifestyle offering and the two hotels that we’re building will create permanent jobs. We’re very confident that during construction, we will create cyclical jobs and then post-construction, we will create a vast number of permanent jobs on the precinct.

A starting price of just under R2 million for an apartment at Harbour Arch is quite reasonable, considering the vibrant Cape Town property market.

We’ve really tried very hard to understand the target market; and we think the target market is a combination of young professional people who want to live and work in the CBD as well as young families who also want to live in the CBD. We’ve tried to make sure that our product range is priced in such a way that we have property starting at the R1.7-million all the way through to the maximum price of R7 million. The mean price is around R2.5-million—we’ve got a vast number of units priced at about R2.5million—and we think it’s very affordable, particularly when you want to compare it to international prices.

Your company will have invested billions of rand when these new developments are completed, where does the money come from and how long would it take for you to recoup that investment?

It is a large amount of money and it speaks volumes about our confidence in the city. The equity comes from our own group, the Amdec Group. It’s a large and relatively successful group, we’ve been around for 28 years. We’re a private company, we have a fairly strong balance sheet, so all that equity will come from our own resources.

We are very fortunate that we have great partnerships with all the major banks in South Africa, we’re very well-supported by the likes of Standard Bank, Rand Merchant Bank and ABSA Bank. We’re confident that we will be able to raise the small amount of debt-funding that we need to combine with our own equity injection to build the building from our own resources and as we have done with Melrose Arch, we will develop it over a protracted period of time, and expect it to take eight to 10 years to complete the building. We don’t require a cash injection from any third parties.

Is one of the keys to your success having deep pockets, without having to dip into too much debt?

It certainly helps to have your own equity but it wasn’t always that way. We’ve been in business for 28 years. We can clearly remember less prosperous times where we had to work a little bit harder to make things work. It makes one a little bit more humble and a little bit more grateful for where the business is today.

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