Playing the game: A comparison of international actors in real estate development in Modderfontein, Johannesburg and London’s Royal Docks

Abstract

In highly internationalised cities, real estate developers must learn to negotiate global-local tensions to territoralise their work and secure planning permission. This paper examines how they do this and positions itself at the meeting point of research on policy mobility and real estate. Developers have been shown to be co-coordinators of development processes, and one of many agents who facilitate the global flow and production of urban spaces and ideas. In these endeavours local knowledge is important yet developers remain interested in sites beyond their home city. This paper questions what strategies developers utilise to become co-ordinating forces in new cities, a pertinent issue because increasingly urban actors position themselves as 'global' or beyond a geographically circumscribed space.Based on 60 interviews across London's Royal Docks and Johannesburg's Modderfontein, this paper argues that to work in a new location, developers and their consultants must utilise local knowledge, highlighting three specific strategies: (1) on-boarding local political actors; (2) hiring individuals who primarily work in the city and (3) becoming part of 'the club'. These illustrate the ways developers localise themselves, 'learning to play the game', and evidence the consequences for where and how urban politics happens. Ultimately, this paper argues that at the heart of internationalised urban environments there are transnational networks which are becoming sites of urban politics where assemblages of actors are formed that make the global movement of urban ideas possible.

How Subordinate Financialization Shapes Urban Development: The Rise and Fall of Warsaw's Służewiec Business District

“…In the case of Mexico, David and Halbert (2014) showed how small local developers change their business model and reporting practices to attract financing from global investors. Finally, Brill (: 1) has demonstrated how international developers use different strategies ‘to negotiate global–local tensions to territorialise their work and secure planning permissions’.…”

Failed Fantasies in a South African Context: the Case of Modderfontein, Johannesburg

“…This insistence partly came down to ignorance about the market on the part of the developer (Brill 2018). As one of the engineers working on the site explained: Byou know you people are just completely detached from reality and how little money people earn^(Engineer, May 2017), especially when they come from cities where things are built differently (Brill 2018).…”

“…Operating under the framework of a 'new urban district' (Zendai 2013) and enmeshed in narratives of smart/ sustainable urbanisation, the project would consist of 55,000 housing units, 1,468,000 square meters of office space and all of the necessary amenities for urban life (Ballard et al 2017). However, in the three years after acquisition, they achieved very little, unsuccessfully navigating the local political context (Brill 2018) and failing to get planning permission. In early 2014, the company sold their shares in the project to the China Orient Asset Management Company, who later moved it on to a different developer, based in neighbouring Pretoria, who has extensive experience building large residential areas and is expected to use the land to begin their residential development business in Johannesburg.…”

“…In 2011, Zendai, a Shanghai-based developer, began looking for overseas investment opportunities as they believed that property purchase restrictions put on developers by the Chinese government necessitated international expansion. By 2012, Zendai had purchased 1600 ha of AECI's 'surplus' land in Modderfontein with funds from Bank of China and announced plans to build 'the Manhattan of Africa' through a fan-fared media release (Ballard et al 2017;Brill 2018;Zendai 2017).…”

“…As a development organisation, Zendai had little experience with this size of project; in Shanghai, they had been involved in significantly smaller schemes including 'Thumb Plaza' and 'The Himalayas Center' (Zendai 2013;Dittgen 2017). To address this relative lack of experience, Zendai kept the existing Heartland team and hired a number of international consultancies to draw up a comprehensive masterplan for the area (Brill 2018), as is typical of large scale developments aimed at international audiences (Watson 2014). Indeed, Zendai's original plans called for a megadevelopment which would serve as not only the base for its own expansion into the continent, but also Bbecome a hub for Chinese firms investing in Sub-Saharan Africa^(Dai quoted in SCMP 2014).…”