China’s slowdown Will Not Hurt SA’s ‘New York of Africa’ Project
By Kevin Mwanza Published: September 24, 2015, 3:33 am
Modderfontein, an artist's impression Photo: TheGuardian
Chinese construction firm, Shanghai Zendai Property, constructing one of Africa’s largest real estate projected in South Africa, dubbed the ‘New York of Africa’, says it is confident that an economic slowdown in back home will not hurt the project.
On Tuesday the Chinese firm launched the first phase of the $7 billion Modderfontein New City on the outskirts of Johannesburg and said the project was on course.
The company has already invested over $100 million in the first phase, which include some luxury accommodation units. The development will see $280 million in infrastructure spending by 2017.
When complete, in 15 years time, the city will include offices, a light industry park, housing for 100,000 people, schools and entertainment centers. The development is expected to create 23,000 jobs and add about $370 million annually in taxes.
Anthony Diepenbroek, chief executive at Shanghai Zendai, told a press briefing in Johannesburg that a slowdown in the Chinese economy will not affect the project “at all” since the company also raised local financing.
He said the success of the project was “going to be a function of the local economy.”
On its part, South Africa’s economy is not doing very well and is headed for one of the slowest growth since the 2008/9 financial crisis. The country is faced with lethargic energy crisis due to its aging power grid, labor unrest in the mining industry which has been hurt by lower commodity prices on the international market and other contagion effect from an economic slowdown in china and strengthening US market.
China is headed for its slowest growth in 25 years this year and its markets have tumbled in the last few months, giving global markets a scare.
Chinese companies have been building roads and infrastructure across sub-Saharan Africa for years, but the Modderfontein project will be among the largest real estate deals by a Chinese firm on the continent.
The development will be located 3.3 miles from Sandton and four miles from South Africa’s main international airport, according to Reuters. It is also near Alexandra township.
Described as an international residential community, the project may attract some of the estimated 300,000 Chinese living in South Africa, Reuters reported last year.