Prasa plans R500m Braamfontein development
Category Property News
THE state-run Passenger Rail Agency of SA (Prasa) plans to invest R500m to deck over the Braamfontein rail-stock yard for mixed-use property developments that will link the Johannesburg inner city with the historical suburb of Fordsburg.
The plan was part of Prasa’s programme to extract more value from its property portfolio, making it less reliant on government subsidies, CEO Lucky Montana said yesterday in an interview.
The plan will see Prasa release 43ha within the Johannesburg inner city, which has been undergoing a revitalisation programme. Next month the final section of the Gautrain service is expected to become operational, according to Jack van der Merwe, CEO of the Gautrain Management Agency.
The link with Park Station will boost passenger numbers by 18% and create new opportunities for linkages with commuters using the Metrorail system which operates out of Park Station.
Completion of the Gautrain project will link Park Station, Prasa’s most important station, with the other business nodes in the city and create greater volumes of traffic through the station.
“We have to run a business that provides public transport, and public transport will always be subsidised — it is subsidised all over the world because it makes a contribution to the efficiencies of cities — but the level of subsidies must be correct,” Mr Montana said.
“We have vast assets in our property portfolio and we spend a lot of money on rates and taxes for these stations and buildings but only 4% of our revenue is generated from these properties because they have not been designed to generate income.” Modern railways in Germany and Hong Kong get between 30% and 40% of their revenue from their property assets, he said.
Prasa is also signing long-term leases with clients such as universities in Johannesburg for some of its building stock to serve as student residences. Other buildings such as the Rotunda at Park Station and an old engineering and testing building near Park Station known as the Lab have been vacated by Prasa staff to make way for private investment. The Rotunda is scheduled to become a low-cost hotel.
A conference centre was planned for Park Station, he said. “In Pretoria there are similar opportunities … we have been approached by a restaurant business that wants to set up a business there,” he said.
Prasa had also received approaches about the development of property near the Pretoria station for a gym and a pharmacy, he said.
To date Prasa has contracts with 20 municipalities on the development of properties within and around railway stations.
We spend a lot on rates and taxes for these buildings but only 4% of our revenue is generated from them
Author: Warehouse Finder
