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Johannesburg getting an empty look

A steady exodus of businesses from Johannesburg's central business district is threatening another of the city's landmarks with closure, the building's managers say.

Eleven Diagonal Street is a renowned diamond-shaped blue glass office block, one of the technically most advanced in the city but now standing half-empty as tenants flee to the cleaner and safer suburbs."This building has become an issue because it is a landmark," said Piero Farina, managing director of Anglo American Property Services Pty Ltd., which runs a score of buildings in the city center.

He said it would be uneconomical to keep 11 Diagonal Street open if occupancy rates dropped further.

This seems likely. For more than a decade now, there has been a steady flow of business out of the downtown area, a mini-Manhattan style grid of tower blocks, offices and shops.

The five-star Carlton Hotel, another of the city center's main landmarks, said a year ago it was closing all but 180 of its 513 rooms due to lack of custom.

"It has been very difficult since then too. Hotel trade in the inner city has not been easy. We have to counter very negative perceptions about the city centre," said Tom Molinar, business development manager for the Three Cities hotel group.

Economic recession in the 1980s and, more recently, rising crime and a general lack of municipal upkeep are blamed for the flight. Skeptics also accuse largely white-run firms of fleeing the "African- ization" of the increasingly black city.

Much business has decamped to Sandton, a northern and traditionally white suburb that has turned into a rival city center.

A frenzy of office construction has raced to keep pace with demand, leaving South Africa's industrial center of greater Johannesburg as a whole with a glut of office space.

This makes an oft-touted turnaround in the fortunes of the downtown area harder to realize.

Farina, who said improvements had been made in removing "crime and grime" from the downtown area, estimated that half of the centre's 10.75 million square feet of office space was standing empty, despite rents at only half the cost of Sandton.

One key hope for Johannesburg's city center is the pledge by the major banks and mining houses that dominate South Africa's economy to keep their headquarters there.

ABSA bank (ASAJ.J) has even embarked on building an ambitious 45,000 484,000-square-foot office tower in the center to show its commitment.