Shanghai Zendai Property Ltd. plans to transform a Johannesburg suburb into the “New York of Africa” with an 80 billion rand ($7.8 billion) investment over the next 15 years, Chairman Dai Zhikang said.
The company, based in Hong Kong, will build a financial hub, as many as 35,000 houses, an educational center and a sport stadium in the 1,600 hectares (3,950 acres) of land it purchased from AECI Ltd. in Modderfontein, eastern Johannesburg.
“This will be on par with cities like New York in America or Hong Kong in the Far East,” Dai told reporters in Johannesburg yesterday, speaking through a translator. “Those cities we just mentioned they were there for 100 years. We’re talking about the next 100 years.”
The development, which is yet to be named, will become a hub for Chinese firms investing in sub-Saharan Africa, Dai said. While Johannesburg already offers a base for companies investing in Africa, the city hasn’t got enough space to cater for the growing demand for offices and homes, he said.
The Chinese developer paid AECI 1.06 billion rand for the land, it said in a statement two days ago. The area is currently home to an explosives factory that opened in 1896 to support the gold-mining industry. It includes a wetlands area that will be protected, and could be the equivalent of Central Park in New York, Dai said.
The property is about 15 kilometers (9 miles) east of Sandton, the city’s main financial center, and the same distance west of OR Tambo International Airport, Africa’s biggest airport.
Shanghai Zendai’s plan is surprising as office vacancies in northern Johannesburg are “pretty high” and demand for residential properties is relatively stagnant, John Loos, a property economist at Johannesburg-based First National Bank, said by telephone today.
“We need to think about our urban planning and not go and create an oversupply of commercial property,” he said.
That said, Johannesburg will over the next decade cement its position as an African regional hub and continue to attract demand for office space and housing, Loos said. Gauteng, which contains Johannesburg, is South Africa’s fastest-growing province, he said.
Shanghai Zendai will invest its own money in the project and work with other developers, Dai said. Once complete, the city will provide jobs for 100,000 people and house about 100,000 more, he said.