DEMOLITION at the Malgas site, which is to become the biggest development in Cape Town since the V&A Waterfront, began yesterday (Monday).
After buying the land from the City of Cape Town for R89 million in May last year, the Old Mutual Property Group plans to build a R1,2 billion development - known as the Portside development.
According to Neil Gardener of Old Mutual, the mixed-use development - which is to be situated along Buitengracht Street between Hans Strijdom Avenue and Mechau Street - will consist of 46 storeys, making it the tallest building in Cape Town.
The current tallest building in Cape Town is the old BP building, now known as the LG building, which stands at 133 m.
The Portside development will top this by 17 metres, and will stand at 150 metres.
It will comprise 27 floors of office space. Six floors will form a hotel, two floors will be retail space, and 11 floors will be allocated for parking to accommodate 1 250 vehicles.
There will be four basement levels and seven above-ground levels for parking.
While a height restriction in the city centre of 60 metres, the city's Spatial Planning, Environment and Land Use Management Committee approved the height waiver at 137,5 metres, plus an extra 10 metres for lift overrun, cooling towers and water tanks, thus allowing the development to go ahead.
"One of the conditions of sale was that Old Mutual should prioritise the building of 564 residential units and a retail and commercial development of about 6 000m2 on a ten hectare property in Khayelitsha," says Mansoor Mohamed, executive director for Economic, Social Development and Tourism.
Old Mutual is still to decide on the operator of the hotel and the composition of retail tenants, but says retail tenants will be complimentary to the hotel and surrounding areas, says Gardener.
He adds that it will be an A-Grade office building, which will "compete with other office towers in Cape Town". Demolition at the site started yesterday and should continue for the next month, after which excavation will take place for four to six months.
"By April 2009, you should see more than just a hole in the ground," says Gardener.
The development is to be completed by June 2011. The site, which housed a service station and the Brian Porter showroom, is described as a prime location for office space.
"We feel there is an extreme necessity to provide office space," says Gardener.
With the 2010 Soccer World Cup approaching, Old Mutual has every faith that this is a good investment and that the interest rate may have stabilised by completion of the development. "Property is a long-term investment, so we are taking a guess, but there is every indication that 2010 will have a positive impact."
The city recently undertook a Sea-Level-Rise Risk Assessment study, and while rising sea levels along the Cape's shores are certainly a concern, both Old Mutual and the city are not concerned that they will have any effect on the stability of Portside, given the enormous size of the development.
"While the impact of climate change on rising sea levels should not be underestimated, it is important to note that a lot has to be learnt about compensating factors, such as the widening of the sea bed," Mohamed states.
"It is a long way from the shore line, and rising sea levels tends to be a bit of an exaggeration," says Gardener.
Businesses that surround the development include the Farber's building, Investec, Madison Property and the Southern Sun Holiday Inn. A business opposite Portside declined to comment on the development.
According to Simon Grindrod, Mayoral Committee Member for Economic, Social Development and Tourism, full public participation took place before the project was approved.