The Maboneng Precinct: Rising from the ashes of Propertuity

By Tshegofatso Tlaka

                                                                                                                                   Maboneng, a place of light 2019

The Maboneng Precinct has been a South African tourist attraction for many years and its located in a city setting whereby there are various African artworks, restaurants, clothing and handcrafted products. On the 15^th of April 2019, 20 Buildings in Maboneng have been placed for auction, this includes buildings that are at the centre of the cultural hub. The buildings include Arts on Main, the Container residential development and the 64-room Hotel. Maboneng is unique in its nature and is a beacon of South African culture alongside other African artists and creatives who present their work in the area. The Maboneng became increasingly difficult to manage and found some of its properties in a liquidation sale. This marked the end of the Propertuity – the company behind Masoning.  

Propertuity was founded by Jonathan Liebmann and built what is Maboneng today into a multi-dimensional residential and commercial district. Propertuity’s aim was to revive Johannesburg’s inner-city scene and did so by creating a platform for local creatives and businesspeople from a working-class neighbourhood into the cultural hub it is today. Maboneng was criticised for being too expensive for making the area inaccessible for individuals who lived in the area which are poor South African and African immigrants. Liebmann defended his projected by illustrating that property in the area were low therefore he was promoting renewal and reinvestment. Propertuity aimed to revitalise the buildings it acquired in the area of Maboneng into businesses and residential developments. Propertuity’s portfolio included retail, residential, advertising agencies, private studios and art galleries. Propertuity aimed to create the modern urban space filled with creativity and a taste of culture. This was key in the success of the Maboneng Precinct as we know it today. Populated with creative and artistic individuals who quickly took residence in the studios, art galleries and private spaces that were made available. This was paired with the PR campaign undertaken by Propertuity allowed for the Precinct to become a magnet for investment and development. 

                            Maboneng before liquidation, 2019

BusinessDay reported that the financial services firm Rand Merchant Bank (RMB) bought 49.6% stake into Propertuity. The company started to stumble shortly after the deal and Liebmann and 50 other staff members quit in May 2019. RMB stated in that they underestimated the operational complexity of expanding business therefore decided to liquidate Propertuity. In an interview with MoneyWeb Brian Roberts of RMH Property stated that the buildings will keep their current managers but will have different owners. “We were disappointed by the liquidation of Propertuity. It followed extensive measures by the company to rescue the business, but fundamentally there were a number of underlying company-specific challenges which led to its liquidation, including overly optimistic asset selection, unrealistic valuation expectations, limited management capability, excessive gearing and operational challenges” said, Roberts.  

The departure of Liebmann in 2019, Van der Merwe attempted to get Propertuity out of its financial challenges. “As chief executive, I did all I could to manage the gradual completion and sale of the various assets that had been developed before Jonathan Liebmann left the company. Unfortunately, I did not have much time to establish my mark on the business before the high level of debt (which had accumulated before I started at the company) made operations untenable.” 

“Many of the buildings were already sold by the time of Propertuity’s liquidation and maybe two of the buildings in Maboneng are still on sale today”. Propertuity was successful in buying, renovating, and also selling and managing the buildings in Maboneng so after they were still functioning, business is still on and functioning”, stated Sthembiso Dube, manager of the Maboneng Civic Association. The director and founder of Maboneng Civic Association Stuart Thomson, believes that Maboneng will continue to shed its light in Johannesburg, “I think the story of Maboneng is only just beginning — it was started by one developer and he had an idea and a vision and what you are seeing now, it’s sort of that. What is happening is that you have a lot of investors and developers who, 10 years ago, would not have looked at this place at all; now you have R2.5-billion invested to create 2 000 residential units. That is all because of the initial plan — it’s a lot busier and more vibey than it has ever been,” said Thompson in an interview with Mail & Guardian. 

                              Maboneng after liquidation 2020

The Maboneng Civic Association representative S’thembiso Dube further explains that Propertuity’s issues will not hinder the day to day functions of the cultural hub. “There has been no impact from Propertuity’s liquidation so far because building managers have been working to together in facilitating services that were performed by Propertuity such as security guards on the grounds”, stated Dube. Covid-19 has been had negative influence on Maboneng and the businesses within the region with restaurants required to operate for delivery and take-away purposes, “because of Covid-19 Maboneng is quiet but some of the restaurants are still operating but only for take-aways so when things go back to normal as Stuart Thomson said, it is only the beginning Maboneng will come back”, said Dube

                                                   Entrance of The Museum of African Design 2020

The Museum of African Design offers various artworks and includes a clothing store, Unknown Union which sells streetwear and contemporary fashion drawing from traditional fabrics for men and women. Robert Moleleki, in-store manager of Unknown Union stated he is wary of the new direction that will be taken by the new owners of the major buildings of Maboneng that were placed for auction. Unknown Union’s building, Museum of Modern Art has acquired its building keeping its interests safe. “It’s pretty messed up that the developers went into liquidation, I think it’s going to affect a lot of businesses here because we don’t know what the new owners are gonna do with them buying the properties however we were quite fortunate that we managed to acquire this building before the liquidation took place so we can only hope for the best of whoever is gonna takeover from here on.” 

                                                   UNKNOWN UNION 2019 

Sawbona Café, located at the heart of Maboneng is a vibrant café and restaurant that provides a trendy and relevant eatery and social place in Maboneng. The eatery has been temporarily closed since the national lockdown on the 26^thMarch but, owner Busisiwe Nethononda was pleased that will be reopening by the end of June due to the easement of restrictions. Through a phone call discussion, Busisiwe explained that her business had not been affected by Propertuity’s liquidation in 2019 but have been suffering at the hands of Covid-19. The global pandemic has had negative effects on the economy and businesses have been suffering heavily from this. 

The Betrand Café, located a few steps from Sawubona Café was founded in 2018 and with litte influence from Propertuity. The Café has been not largely affected by Propertuity’s liquidation as “ownership of the building has not changed and the impact to Bertrand has been miminal. The Betrand Café representative stated that “Maboneng is continually evolving and there are several challenges in terms of financial strain to many businesses due to COVID-19 that most of the world is facing. The Bertrand Café hopes to hit the ground running once the pandemic subsides allowing for business and social life to resume “We hope Bertrand can take a phased approach to reopening as soon as it’s safe to do so.” 

Propertuity's project in Maboneng saw the support of many creatives and urban developers in the country. 2016 saw the height of Maboneng but this was short lived as Propertuity was liquidated 2 years later. S'thembiso Dube, MCA is confident that Maboneng will continue to grow and bring more culture and creativity that it has done before. COVID-19 has had a huge impact on businesses in Maboneng causing them to temporarily close their doors. Lockdown restrictions have been slowly eased by the government and have allowed businesses to slowly operate again and this may be the chance that Maboneng has been waiting for to shine its light even brighter than before and continue to be the cultural beacon of Johannesburg.