Prolonged water challenges in Johannesburg are putting a strain on landlords, forcing them to absorb additional costs.
With water supply disruptions affecting properties, landlords are forced to offset the effect on tenants, ultimately hurting their bottom line. Water shortages have resulted in most landlords working on increasing their backup water facilities from two to three days’ supply.
Last month, Johannesburg residents faced water disruptions as Rand Water carried out essential maintenance at its Eikenhof and Zwartkopjes pump stations.
SA Multifamily Residential Rental Association CEO Myles Kritzinger said the water crunch was another example of failed infrastructure in Johannesburg.
“Depending on the property, many people must make provisions for water, such as temporary tankers, to meet supply and demand. From a sustainability standpoint, landlords are beginning to invest in their own solutions and systems, such as water harvesting and boreholes, so they don’t have to rely on the municipality,” Kritzinger said.
“However, this comes at a cost. It’s not necessarily a beneficial or profitable decision where you’re investing a large sum of money hoping for a return. It’s a necessity you are compelled to provide.”
Kritzinger noted that landlords, to protect the value of their properties, must take ownership and responsibility for any issues.
Depending on the property, many people must make provisions for water, such as temporary tankers, to meet supply and demand.
— SA Multifamily Residential Rental Association CEO Myles Kritzinger
When service delivery was lacking, relying on the government was not an option and landlords were left to cover the costs themselves, he said.
For example, JSE-listed Balwin Properties, whose corporate headquarters at 105 Corlett Drive in Johannesburg recently earned an “As Built” Six-Star Green Star rating — the highest of its kind for any office building in South Africa — harvests rainwater to reduce the use of potable water for irrigation. Additionally, the building features low-flow water fittings, which further decrease its reliance on municipal water.
Meanwhile, Alley Roads, an affordable housing developer, announced last year it was piloting off-grid water solutions at its Khaya Lane housing development in Lebowakgomo, 45km southeast of Polokwane in Limpopo. The group recently transitioned more than 1,000 affordable housing apartments off the national power grid.
Kritzinger said the situation in Johannesburg was a huge concern and would be worse when people came back from the holidays in the coming weeks.
The water restriction challenges are expected to persist this year as highlighted by some of the risks mentioned in Rand Water's recent annual report. These include rising credit risks due to non-paying customers, delays in infrastructure project implementation and completion and the unsustainable supply of potable water.
Borehole Africa CEO Shane Solomon told Business Day Johannesburg was experiencing a severe water crisis with supply disruptions lasting as long as 86 hours. He believed the worst was still ahead.
“Each asset class of property is affected in a different way. For example, an industrial property will not be able to manufacture, a hotel will not be able to accept guests, in an office setting employees will not be able to go to the toilet and have to work from home, and in the residential space people are having to fill their toilet cisterns with purchased mineral water — costing a fortune and only being practical for an outage of a few days,” Solomon said.
He blamed the crisis on failing infrastructure and drought conditions. Issues such as illegal connections, high non-revenue water, leaks and burst pipes were also stressing the system, with more than 30% of Johannesburg’s water lost to these problems.
“Many property companies, estates and hotels are opting for a borehole solution as a reliable and independent water source. We have seen a huge uptick in take up over the past few months. We expect this to continue to increase. In Johannesburg the likelihood of finding drinkable water depends on the location and depth of the borehole,” he said.
Solomon said groundwater in certain areas was of good quality, but it was essential to conduct proper testing and install the appropriate water treatment plant to ensure the water was safe for consumption.
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