Public Land Development Research Programme
The Public Land Development Research Programme is a major research stream being run through the URERU and is sponsored by the Johannesburg Property Company (JPC). The research represents a collaboration between the URERU, JPC, the City of Cape Town and the City Support Programme in the National Treasury.
Public Land Lease Length Model
The Urban Real Estate Research Unit is attempting to gain a greater understanding of how best to structure the terms and conditions of Public Sector Land Development Leases within the South African Legal Framework.
Municipalities and other public entities in South Africa often dispose of land they own to generate income for municipal purposes and or to achieve broader economic and social objectives. To date, the most common method to do this has been to dispose of the land on a freehold basis. However, this approach has been questioned in that it is argued that the municipality may forego higher annuity income in the future and the long-term assets are lost in perpetuity.
Despite these concerns, there has not been a systematic assessment of the advantages and disadvantages of disposing of public land through leasehold versus freehold methods and how such disposals should be structured in each case.
In response to this, the Public Land Development Research Programme in URERU has developed a financial model to assess the optimum length of a public land development lease. Below is the first draft of this model.
Leasehold Structure Case Study: The Waterfall Estate
The Waterfall Estate is a successful development undertaken using a leasehold model between private parties. Through this process, numerous issues and challenges have been resolved such that a leasehold structure has been designed that addresses the needs of the land-owner, developers, financiers and buyers and end-user tenants.
The Urban Real Estate Research Unit examined the Waterfall Estate case in order to assess whether municipalities could dispose of their land using a similar leasehold model. A particular focus was placed on the security offered by the lease agreements, the sale, cession and sub-letting conditions of the lease agreements and what happens at the end of the lease terms.