In 2014, Chinese development group Zendai Developments announced its intention to build an $8 billion (approximately R84 billion at the time) city in Modelfontein, east of Johannesburg.
The development is anchored as a smart city comparable to Sandton, with nine functional zones including the CBD, entertainment centre, residential and educational precincts.
The project was to be built over 15 years on 1,600 hectares of land (scheduled for completion in 2030), house around 30,000 households and create up to 200,000 permanent jobs for the local community.
Modderfontein concept
However, after announcing the start of construction in 2015, some infrastructure development progressed the following year, and news about the project went silent by mid-2016.
And by the end of the year, the project was finished.
In 2017, South Africa’s Competition Tribunal approved the sale of Zendai to local development group M&T for R1.8 billion.
According to a late 2018 report by Noseweek, Zendai Developments faced financial problems with net debt amounting to R216 million.
According to the magazine, Zendai cited South Africa’s poor economic situation (which was at the peak of Zuma’s decline in 2017), the uncertain future of the real estate market, and the fluctuation of the rand as reasons for abandoning the project.
The 1,600 hectares of land is currently within M&T’s portfolio and is understood to be earmarked for the same type of high-density residential units the company is known for around Centurion and Tshwane, according to Noseweek.
what happened?
The study, carried out by Ricardo Rebolledo, a PhD candidate in geography at Trinity College Dublin, and Francis Brill, a researcher at UCL, followed the project over the past six years and sought to determine what went wrong with the plan.
Researchers say the project was hampered by conflicting visions between the developer and the City of Johannesburg.
This was further exacerbated by unexpectedly low demand for housing and office space. This meant that the project’s original plans were incompatible with the city’s real estate market.
“Zendai’s desire to deliver a high-end mixed-use development did not mesh with the City of Johannesburg’s approach. Rather than a luxury global hub, the City wanted a more inclusive development, one that reflected the principles outlined in the 2014 Spatial Development Framework,” the researchers said.
To achieve this goal, the city required Zendai to include at least 5,000 units of affordable housing in its plans. We also wanted to ensure that the development was compatible with and complementary to Johannesburg’s public transport system.
“The city was willing to provide funding for the necessary infrastructure and inclusive housing,” the researchers said.
However, it turned out that Zendai remained rather steadfast in its commitment to the city’s original vision and ultimately stopped incorporating the city’s wishes into the planning application altogether. This led the city to develop a planning process.
In the meantime, Zendai’s problems have piled up.
“Owner Dai Zhikang was ultimately forced to sell his stake in the project to China Eastern Asset Management Company. Instead of continuing with the project, the asset managers sold the land to a company behind a new housing development (M&T) on the site,” the researchers said.
Read: R84-billion smart city coming to Gauteng
