Abstract
Many factors contribute to urban decay in inner city locations as real estate investments fall and industries disappear or move to more attractive locations. In South Africa, the attainment of democracy and the resultant ‘white flight’ in favour of decentralised locations precipitated urban decay. Commercial real estate has spill-over effects on foot-count and absorption rates on inner city real estate. It helps stimulate redevelopment of other property types such as apartments, which contribute to the overall economic revitalisation of the decayed inner city. This paper examines the challenges faced by real estate investors in regeneration projects in Johannesburg Inner City (JIC). The paper uses an exploratory qualitative research design, where interviews were conducted with commercial real estate participants in JIC. The paper identified five challenges faced by commercial real estate market participants regarding investments and operations: building acquisition, physical public infrastructure, homelessness, lack of financing, and crime. An understanding of these challenges faced by commercial real estate market participants is valuable for policy-makers trying to attract commercial real estate investments to the inner city. Successful regeneration projects will promote urban renewal and revitalise economic activities in the decaying regions. The identified challenges will illuminate municipal programs and policies needed for the development of inner cities.
Highlights
Urban decay is a problem that represents a state of disrepair and abandonment of previously functioning inner cities by businesses in preference for better locations (Ferilli et al, 2017; Goo, 2017)
The purpose of this study is to assess the challenges faced by commercial real estate market participants regarding the regeneration of Johannesburg Inner City (JIC)
The results indicated inefficiencies in the way the municipality handles property acquisition for regeneration purposes thereby hampering the success of regeneration projects in the acquisition stage
Summary
Urban decay is a problem that represents a state of disrepair and abandonment of previously functioning inner cities by businesses in preference for better locations (Ferilli et al, 2017; Goo, 2017). Attracting property investments into urban regeneration locations will help in revitalising decaying inner cities (Adair, et al, 2003b; Didier et al, 2012; Goo, 2017; Massey & Gunter, 2020). In this context, urban regeneration attempts to create long-term solutions that improve economic, social, physical, and environmental conditions of inner cities (Zheng et al, 2014). As a result, understanding property investment risks in the urban regeneration process is essential for achieving regeneration objectives
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