Hong Kong -listed Shanghai Zendai Property Ltd. has revealed plans to transform Modderfontein, a suburb in eastern Johannesburg, South Africa into the “New York of Africa”, with an R80 billion ($7.8 billion) investment over the next 15 years.
According to the company’s Chairman, Dai Zhikang, the Chinese developer will partner with other real estate developers to build a financial hub with as many as 35,000 houses, an educational centre and a sport stadium in the 1,600 hectares (3,950 acres) of land it purchased from explosives and chemicals group, AECI Ltd.
Shanghai Zendai paid AECI R1.06 billion ($98m) for the land which is home to an explosives factory that opened in 1896 to support the gold-mining industry. The land is strategically located about 15 kilometres (9 miles) east of Sandton, the city’s main financial centre, and the same distance west of OR Tambo International Airport, Africa’s biggest airport.
AECI would however keep control of the Modderfontein Reserve, which was not part of the deal.
According to Dai, the acquired land will “become a hub for Chinese firms investing in sub-Saharan Africa” and “the future capital of the whole of Africa.”
The land includes a wetlands area, which will be protected, and could be the equivalent of Central Park in New York, he said, adding that “It will be on par with cities like New York in America or Hong Kong in the Far East.”
Once complete, the development, which is yet to be named, will create nearly 22,000 jobs over the next 10 years, 65 percent of which will be semi-skilled and unskilled.
The firm estimates direct and indirect benefits for the economy will total R14 billion ($1.3 billion) over the same period.
Speaking on the sale of Modderfontein, which is AECI’s largest single land deal, the company’s CEO, Mark Dytor said the sale will ensure the company focuses on its core business – chemicals and explosives.
AECI will give the Chinese company a 15 percent discount for providing cash upfront.
Shanghai Zendai will still need to build roads, electricity and other infrastructure as the property is largely undeveloped.
Dytor said the company has about four years to transfer the land to the developers and would receive the whole amount around July 2014, subject to AECI delivering the first tranche of land.
Other conditions precedent to the land deal is subject to approval from Shanghai Zendai’s headquarters and the South Africa’s Competition Commission.
Meanwhile, Gauteng Premier Nomvula Mokonyane expressed delight at the multibillion-rand deal which he said will help create jobs and enhance economic activity in Gauteng.
“We are thankful that Shanghai Zendai chose to bring its business to Gauteng and assure the investors that we…will continue to work with them to ensure that their vision of building a major business and tourism hub becomes a reality,” he added.
Africa’s largest economy, South Africa is not the the only country in sub-Saharan Africa with such a project.
Last year, real estate developers, South Energyx Limited annouced a $6 billion plan for a beach front metropolis, Eko Atlantic City in Lagos – the commercial hub of Nigeria.