Category Archives: Durban

Backleasing, Backsliding, Boom or Bust

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Cell-C-tower

Cell C, South Africa’s third Cellular operator is now a tenant in 960 towers that they used to own! Huh? It’s true, it’s called a sale-leaseback or backleasing and that’s an investment that may interest you.

American Tower Corporation purchased, through its South African subsidiary Helios, 329 more telecommunications towers from Cell C for R965 million bringing the total to 960. American Tower will is  acquiring up to 1,800 additional towers currently under construction..

Cell C is now an anchor tenant on each of the towers purchased, and its relationship with American Tower is  enabling it to further enhance the quality and coverage of its cellular network.

So what exactly is a sale-leaseback when it’s at home in front of the fire? A sale leaseback option allows a company to sell its assets and lease them back simultaneously. This can be beneficial for businesses that are in need of an inflow of capital.

This practice isn’t new at all. In France it’s been popular for over thirty years. In other Western economies it’s widespread and its trends generally flow from the US.

Originally, sale and leaseback transactions were only applied to tangible assets, such as property, plant, machinery and equipment. However, since the mid–1990’s, its application has increasingly been extended to incorporeal property, including trademarks, patents, designs, copyright and know-how. When applied to intellectual property, the leaseback and associated rental payments are more correctly referred to as licence and royalties, respectively. But we’ll focus on leasebacks in property in this article.

download (3)Looking at world trends first: sale-leaseback’s in the US were at their highest in 2007 when $16.1 billion in sale-leaseback properties traded hands. Transactions have increased over the past 18 months. After hitting a low of $3.7 billion in 2009, nearly $4 billion in sales closed last year and another $2.6 billion had occurred this year so far.

In the US a set of rules was set up to guide such transactions by the Financial Accounting Standards Board in 2003. Crafted after the Enron disaster to force most off-balance-sheet financing back onto the books, these rules are expected to encourage many companies to convert, once popular, but now discredited, “synthetic leases” by which companies maintained control of the property while gaining tax benefits,  into more legitimate “true leases,” such as sale-leasebacks and net-leases.

Companies mainly used synthetic leases as a way to keep real estate debt off the balance sheet while reaping all the other benefits of owning real estate. (A synthetic lease is when the money to finance the asset is borrowed, and the lender takes a security interest against the asset, but has no further recourse against the borrower / operating company.)

There are instances in which prioritising the use of an asset is more important than wanting to own it. Usually in these situations liquidating assets would bring business operations to a standstill as the use of the asset is integral to the functionality of the enterprise.

Unlike a traditional mortgage, which often finances 70% to 80% of the property value, a sale-leaseback allows a company to get 100% of the value from the real estate.

Sale-Leasebacks can be constructed flexibly providing options to both seller and investor. Some examples would include offering a Joint Venture type involvement allowing the seller to share in a certain predetermined percentage capital growth gain in value, or structure buy-back options on certain pre-determined conditions. Investors can also provide themselves with certain down side protection.

Within this context one ought to consider the net-lease too, whereby a company finances a new location by finding third parties to buy the property and then leasing it from them. There is a surge in such transactions currently in Western Economies. It has been opinioned that this is partly because companies with weak credit ratings are finding it hard to get conventional financing and are increasingly turning to real estate as a source of cash.

However it has to be said that even solid companies with strong credit ratings are looking for ways to raise cash to retire debt and improve their financial ratios.  In fact, many of the biggest names in business — including Microsoft, and Wal-Mart have used leaseback over the years.images (7)

Bri-Anne Powell, investment consultant for Pam Golding Commercial in Gauteng is reported as saying “There are investors in the marketplace who have an appetite to purchase sale and leaseback properties, preferably industrial in nature, in visible, strategic locations. In terms of industrial property the areas of the Durban South, East Rand, Midrand and Centurion are favoured, and in regard to very large industrial properties it is preferred that these would comprise a main warehouse or factory which would be located near OR Tambo International Airport.”

Sale-leasebacks ought not to be a prospect for an investor who isn’t going to cope with the potential struggles of owning commercial real estate or an investee who can’t afford to loose his asset. If a company that’s leasing a property goes bankrupt, the court may not uphold the lease. So the’ buyer beware’!

The recipe to being a lucrative investor in sale-leasebacks is not just appropriate decision-making but to make use of one’s asset to maximum effect.  For the purchasing party to a sale-leaseback, they have acquired a property with potential for growth and a long term income flow from the lease. On the sale side of the transaction there is the liquidation of an unwanted or superfluous asset whilst retaining long term use of the same through a lease agreement.

A Man and His Butcher are not Easily Parted

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The ever helpful and courteous Emil from Waterfall SuperSpar Butchery

There’s something very masculine about meat, isn’t there? The immediate image that comes to mind is the braai. Generally and mostly it’s men standing around advising other men about how often to turn the meat, what adjustments the fire needs for different meat and so on. That’s why male vegetarians aren’t really complete men- kind of like missing a testicle.

This is not to ignore the fact that it is actually mostly women that prepare and cook meat but without the fanfare and drama that male meat interaction seems to involve.

An example is the poitjie. Men who wouldn’t know how to boil an egg for dinner and practically strain themselves to find the cereal or burn themselves making toast become experts on all matters culinary when preparing meat for the potjie, its tenderisation, the slow cooking of, flavouring, what spices and herbs to apply, the works.

In fact rarely does one see the high level of sophistication men embrace when it comes to meat outdoors. Wives who try to solicit an ounce of assistance with the evening meal preparation during the week are met with nonplussed expressions and glazed eyes when asked to: “just toss the salad while I:- go to the loo, shift grandpa, change this nappy, move the house to the left.”

Then there’s biltong – do women and children eat it, sure. But who’s the expert on what biltong is the best, most flavoursome and assuming the correct shape – the man. If a woman offers an opinion on biltong, men assume embarrassed looks or bow their heads, and that’s the polite response. What could a woman possibly know about biltong? And let’s not get started on the intricate equipment that men have invented to cut, shave, slice and dry biltong in the luxury of their own home.

This possibly explains something: men and butchers. Men may not be able to find the right deodorant, two-ply loo-rolls, a ripe avo or correct baby formula at the supermarket, but they can be found congregating around the butcher on a Saturday morning. Dozens of them standing around discussing the length of their boerewors, different flavours, contents and uses. (This is the same butcher that housewives have been consulting nonchalantly during the week.)

One may venture that in our society a truly masculine man knows his local butcher – this is the closest men get to hunting in the 21st century. Butchers are the druids or medicine men of the modern western culture. Butchers are greeted with special reverence. Various cuts of meat are discussed, advice is sought and opinions are given. “Would it do better in the Weber, should I debone them before putting them in a potjie, is sixteen table spoons of salt too much, what percentage of fat is optimum in a good wors,” questions that any housewife would come up with a common sense answer for. But men respect the views of their butchers.

So meat is very important to men, it’s a reminder of those cavemen days when bringing home a carcass ensured hugs from small children respect from adolescents and long romantic evenings with Mrs Caveman. Today even bringing home the paycheque is obsolete never mind bringing home the bacon. It’s all done over the net. So ladies give your man a break, when you see him lurking about the butchery for that exciting moment when the butcher comes out, don’t nag, let him enjoy being as close to the kill as he’s ever going to get.

Durban’s Watercrest Mall Finally Putting Waterfall on the Map

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(See my article at Skyscraper City and eProp too http://www.skyscrapercity.com/showthread.php?p=100579753)

The ‘Outer West’ area of Durban, also known as the Upper Highway, is a swiftly developing residential node, but with some distinct commercial nooks and crannies worth watching.

Durban’s Outer West retail landscape is thrusting into another phase of development with the development of The Watercrest Mall in Waterfall.  A number of years ago the Hillcrest CBD experienced much upheaval of the local arterial R102 Old Main Road as it was converted into an all dual carriageway. This was to accommodate the expansion in the area which included the rebuilding of Christians Shopping Centre and the bigger Hillcrest Corner.

Now a dual carriage way is being built, the first few kilometres already completed, for Inanda Road, the road that runs to the centrally located suburb of Waterfall. What were once sugar cane estates on either side of the 8km road from Hillcrest to Waterfall is now made up of luxury estates like Cotswold Downs Golf Estate, Kirtlington Equestrian Estate, 101 Acutts and Cotswold Fenns.  Construction of the dual carriageway up to the new Watercrest mall is expected to be complete within six months of the mall’s completion which is January 2015.

Watercrest Mall

Watercrest Mall

Demacon and Fernridge market research companies have supported the development of a 43 410sqm Regional shopping centre in Waterfall. The primary catchment area of the centre is Hillcrest, Kloof, Forest Hills, Assegai, Gillitts Botha’s Hill, Molweni, Crest view, Crestholm and Waterfall.

The centre is configured on two levels. There are to be two supermarket anchors, Checkers and Spar as opposed to the current single anchor, Superspar. There is a Pick n’ Pay across the road at the smaller Link Hills shopping centre which has taken up many of the old tenants that have vacated the old Waterfall shopping centre. Link Hills was completed just a few years ago with much controversy over permissions and occupancy with eThekwini Metro.

Watercrest Mall Inside

Watercrest Mall Inside

Other representations in the new centre include electronics stores, mass discounters, fashion and homeware. A big plus for the area is the announcement of the arrival of Ster-Kinekor Theatre which includes six cinemas to replace the old Waterfall cinemas that serviced the greater area for many years. An important ingredient to keep the centre alive at night and in creating a community feel – a stated aim of the developers.

Just over 65 per cent of the total lettable area is under lease and some of the 120 tenants include Dion Wired, Game, Edgars, Truworths, clicks, Dischem, Ackermans, Jet, Pep, Cape Union Mart and a full Woolworths. The mall will have both lifts and escalators as well as 2600 parking bays of which two levels are to be covered parking. All the variety and components of a regional shopping mall are promised. The mall’s GLA is estimated at 43 410sqm with the view for a pre-planned further expansion at a later date of 20 000sqm.

Watercrest Mall Inside

Watercrest Mall Inside

The centre was the brainchild of current owners of both the old centre and the Link Hills centre across Inanda road, local family business The Rowles Group, who incidentally live next door to the proposed centre. In the seventies George Rowles developed his dairy farm into a residential area in what was ostensibley a farming community. From there he developed a small centre with a Saveway Spar and couple of shops. This centre went through several expansions over the years adding more shops and more floor area for the Spar, all this hnd in hand with the growth of the Waterfall community. Now the last morphing of that centre is to be replaced by the new Watercrest Mall.

The Rowles Group now shares 50% of the old centre with Acucap. Acucap properties is a JSE listed property company with a retail asset base that exceeds R 5 billion. The acquisition was based on the intention of the co-owners to invest R700m in the re-development of the existing property.

Researchers found that upmarket shoppers in the area are travelling to the Pavillion and Gateway centres due to “lack of critical shopping size and fashion mix” in the area. The Watercrest Mall should meet that need as a one stop retail experience. Its variety of shops alone, should help plug the leak of shoppers from the area.

Watercrest Mall Plan

Watercrest Mall Plan

The developers have secured planning rights and overcome many challenges including environmental applications as well as formal access to a suitable bulk sewerage treatment plant. This initial phase of 7000sqm is currently opening, the Spar, Tops and adjacent parking are being made ready for customers as this area is self-contained. This is so the old Spar can close and the remaining lower level demolished, this way work can commence on the rest of the mall.

My article also appaears  on the Skyscraper city and eProp websites too http://www.skyscrapercity.com/showthread.php?p=100579753

Aerotropolis KZN – putting King Shaka on the World Stage.

King Shaka departures Hall - courtesy Marc Forest

King Shaka departures Hall – courtesy Marc Forest

The Airport Cities World Conference and Exhibition for 2013 has come and gone at the end of last month where Dube Tradeport Corporation unveiled plans for Aerotropolis: KZN.  South Africa’s bigger player on this field, O R Thambo International, had to share some of the limelight as ambitious plans were unveiled for South Africa’s third biggest airport.

Despite the fact that the term aerotropolis has its origins in the late 1930’s and mainstreamed in 2000 by academic and air commerce expert  Dr. John D. Kasarda, one may be forgiven for a lack of familiarity with the word. One definition has it as: an urban plan in which the layout, infrastructure, and economy is centred on an airport, existing as an airport city. In September 2011, the Ekurhuleni Metropolitan Municipality officially announced its intention to transform the municipality into a functioning Aerotropolis with OR Thambo at its hub sending local real estate soaring.

The logic behind the Aerotropolis concept is that airports offer connectivity to suppliers and customers across the globe. Many of the businesses around airports can often be more dependent on distant suppliers or customers than on those locally. The aerotropolis encompasses a range of commercial facilities supporting both aviation-linked businesses and the millions of air travellers who pass through the airport annually.

Growing numbers of firms and service providers are gathering around airports. The aerotropolis is emerging as strategic urban destination where visitors and locals can conduct business, network, shop, even  eat, sleep and play with no need to travel more than a quarter of an hour from the airport. With 7.5 million passengers annually, Aerotropolis KZN plans to be one such destination and has already set its course.

Dube Trade Port

Dube Trade Port

Aerotropolis:KZN – the heart of which is Dube TradePort and King Shaka International Airport  is considered to be becoming a major trade and business hub in Sub-Saharan Africa right on the doorstep of KwaZulu-Natal’s biggest city and primary manufacturing centre, Durban.

What surfaces here is a highly competitive business operating environment, with all the necessary infrastructure in place. All of which gives the area an advantage in accelerating business efficiencies and enhancing the global supply chain. All this potentially sending local commercial property skyrocketing.

The Aerotropolis:KZN  website stipulates that there is a 60-year Master Plan and expresses the belief that airport city is “poised to become South Africa’s business gateway to South Africa, Southern Africa… and the world.” Admittedly there are some components that set Aerotropolis: KZN apart, arguably affording it a competitive advantage over other South African and African destinations.

  • It is a freight-orientated development with world-class cargo facilities, managed by a single handler and considered the most secure in Africa;
  • It is being purpose-built, in particular that which is within a radius of 7,5km of Dube TradePort;
  • It seems  that it is one of few such developments around the world utilising a Greenfield site, with an additional 32 000 acres, ready for planning and development.

Given its unique location between two of Africa’s major seaports of – Durban and Richards Bay – its 32 000-acre ‘Greenfield’ site and the longest airport runway at sea-level in South Africa  (3.7km), capable of accommodating the largest aircraft in the world, King Shaka made its presence felt at the Airport Cities conference.

Finally the development provides for public and private cooperation, co-ordination and alignment with Government planning, ensuring both direct and indirect involvement in its development and growth by not only the Provincial Government, but also attendant Local Government structures, organised business and the private sector.

It’s worth noting that such a strong public-private relationship is rare in the growth of aerotropolis developments anywhere else in the world.

Dube logistics - Ready to Roll

Dube logistics – Ready to Roll

A criticism levelled at aerotropolises in general has been the belief that there is an overstating of the number and types of goods that travel by air. While many types of high-value goods, like electronics, tend to travel by air, larger, bulkier items like cars and grain do not. Those who point this out suggest that the relationship between seaports, airports, and rail facilities should be studied in more depth.

“Airports will shape economic activity and urban development in the 21st century as much as highways did in the 20th century, railroads in the 19th, and seaports in the 18th.” So Dr John Kasarda, says.

Whatever the case may be, Aerotropolis KZN seems very much on track with private sector and government backing. The knock-on effect on local commercial property is worth watching. It’s clear that King Shaka will be the spear in the hand of the people of Kwazulu-Natal in the foreseeable future.

Indigo Skate Camp – Skate and Create

Indigo Skate Camp

I was asked by Ian Wittenbur and Patrick Cummings of US online magazines Again Faster and Evolve to visit a little village in the Valley of 1000 Hills and experiance a fascinating project started by South African skateboading supremo Dallas Oberholzer that started with some skateboads and ramps and has blown up into a full on community enrichment project. Read on.

Indigo

Driving through rural KwaZulu Natal is a reward in itself. Travelling through the rambling beauty of the Valley of thousand Hills comes with a boxer’s bob and weave type of driving through dips and around bends that are loaded with surprises from docile cows to 100 ton trucks.

A cool autumn day presents itself with fat little cumulous clouds floating toward the distant horizon. Colourful wild flowers line the narrow roads.  I feel a sense of excitement at the prospect of the novelty of my intended destination of Isithumba village.

The Indigo Skate Camp is my target amidst all this rural beauty. The skate camp is the brainchild of Dallas Oberholzer, South African skate boarding icon. With the intention of giving back to a community that would almost certainly have never heard of skate boarding, over eleven years ago he put down some roots in the humble yet idyllic surrounds of the village of Isithumba, named after an imposing and impressive rock overlooking the life-giving Umgeni River.

Indigo Skate Camp has giant ramps and a ‘kidney bowl’ structure you would see at any urban skate park. The children from the surrounding area learn skate boarding and other life-skills brought to the camp by overseas tourists who come for a skateboarding holiday. Here the tourist is treated to Zulu hospitality of good food, story-telling and bush walks. Indigo Skate Camp was the beginning and now foundation stone to the Indigo Youth Movement (IYM) which is the road show, if you like, of what’s been happening at Indigo Skate Camp for years.

images (6)Driving into the deep valley toward Isithumba the road is lined with school children on their way home. Friendliness is one of the first things that greets an outsider. People smile and wave as you drive tentatively between goats, cows and curious pedestrians and potholes. I’m a little lost so I stop and ask some mischievous looking primary school children where Indigo Skate Camp is. “Lift, lift, can we have a lift?” The spokesman chances. I say “sure, just show me where Indigo is please.” My dinky Toyota which normally takes four adults is now filled to the brim with possibly as many as 12 under twelve’s’. We travel a kilometre or so and they stop me and hop out. “Is this Indigo?” I point to a driveway. “No” they chorus with shiny impish faces surrounding sparkling white teeth. “Indigo is that way.” They point to the opposite direction. Rascals. Every South Africa urban dweller’s nightmare is being hijacked. I’ll be able to tell my friends about the friendliest hijackers in the country!

Upon arrival at Indigo the impression is not of a scintillating establishment transplanted into the midst of poverty. Though the area is poor it’s neither derelict nor slumish. It’s rural, simple and peaceful. The ‘camp’ is reflective of the community in which it resides. A collective of the traditional Zulu rondavels and other out buildings around the ‘elephant in the room’. I refer to the enormous skateboard ramp, skate pool (kidney bowl) and other ramps. It’s totally out of character with the rest of the scene.

images (5)Wading through the long grass I see a slim, athletic looking man in his mid-forties. He greets me with friendly surprise. He introduces himself as Dallas. Hooray, I’ve caught the big fish in his natural habitat first try. Despite being very hospitable, Dallas is very busy with his financial advisor and doing financial transfers over the phone- not quite aware of the incongruousness of the scene of high tech business world juxtaposed to the rural African backdrop. My appointment is with G. But G is still on his way so I’m privileged to eaves drop on Dallas’ financial meeting cum skateboard lesson on one of the ramps.

I meet a couple of overseas visitors who’ve come to hangout and help-out at the camp. We chat casually about the camp and how impressive the structures are and how beautiful the area is. Helle is from Denmark and is travelling around South Africa to: “Get a feel of the place, to be exposed to other cultures and people.” Indigo welcomes her with open arms and puts her up for a few days while she helps with odd jobs about the camp. Surprisingly she has no interest in skating just learning about how another people live.

It’s now after four in the afternoon and seemingly out of nowhere emerge little bunches of children, some primary school age, other’s well into their teens. Let the skating begin! Some seem content at first to play with their own inertia as they use a little exertion to get their skate boards up one side of the ramp and then up the other. Then comes the madness, four or five kids on the big ramp chase each other in a circle up and down the curves creating a whirring that’s almost manic. Their faces a mixture of intense concentration and abandoned joy. One takes a tumble – the board flies in the air and smacks one of the spectators on the shoulder. He dives to the ground in mock agony, or is it? Everyone laughs as he waves his finger smiling, telling the culprit that he needs to learn to skate. There’s anuproar of laughter and gestures. Then everyone joins in the skating. It’s crowded and it’s difficult to see what’s going on- some kids are practicing tricks others seem content with the rhythm of going up and down at either end of the ramp. The girls look on.

images (7)I approach a stand where about fifteen girls sit. They come from the village after school to watch the skating they say. I ask them: “So why aren’t you skate boarding?” There’s uproarious giggling. “No, no, no not for me.” says a 13 year old. “How, I am too scared to do that” says another. They all laugh and dismiss my challenges to them as foolishness. I make a mental note to myself to ask G about this. While I wait for G to arrive I chat to one of the other leaders of the camp, T. T, short for Thabang, comes from the village and makes it clear that Indigo Skate Camp has provided him with a hope and future that he believes would not others wise be there.  He goes on to explain that as many as 50 kids come and participate in the activities at the Skate camp. On a skating note T reckons that some of the kids have become so practiced that they are more adept than he is on the ramps.

With that I meet G who has arrived after his long trip by minibus taxi having had errands to do in Durban. G is a friendly easy-going young man, although when among the kids he has a very discernible sense of authority. He is naturally hospitable. We settle down under the canopy of some thorn trees upon some makeshift benches made from branches. I switch on my recording device and ask what I know people from outside are bound to want to know.  There is an elephant in the room – a skateboard park in rural Kwazulu-Natal, what is that all about?

images (10)G nods and smiles, he knows exactly what I’m talking about. “It started with the skate camp in 2001 for the guys who came from the cities to come and visit Indigo, we used the tourism centre near the primary school where we used to have our skate camps during the school holidays, bringing the kids from the cities and different provinces to interact with the village kids.

We use skate boarding for social change to stop drugs and alcohol and to talk about life and also to learn more English.  So Indigo, I can say, is a beautiful place and I’m sure you wouldn’t expect to find a skateboard park here.  It is so beautiful, we are surrounded by the mountains of the valley of a thousand hills and the Umgeni River which flows into the sea and usually in January or February we have the Duzi canoe marathon comes past the camp.

From my side, Indigo made me what I am today.  I have learned things in school but I can say I’ve learned more here because I’ve learned things from tourists and courses, learning how to communicate with different people and experience different things.  For me, I am doing the right thing because I love the kids and I love being around the kids seeing them progressing, that was one of my dreams.  Now one of the guys here is better than me, which is quite amazing.”images (3)

I asked about some construction work going on below us.  G explained: “At the moment as you can see we are upgrading the place – we are building some chalets so that when we have a skate camp we will have more accommodation for our guests. “

Dallas had expressed to me earlier that day that he didn’t believe anyone could take what there is at Indigo and plant it, replicate it, elsewhere since what is here is unique. “So G how would you take the concept, at least, of Indigo to say, Tanzania?”

G is unfazed: “Well what I can say is that it is not about me and my ambition but it’s about the camp itself.  You plant a seed and then the seed starts to nurture and becomes a tree.  I feel that we need more youth leaders and role models because we are lacking in role models for the kids (in the community).  Some of the kids drop school at an early age and some of the young girls get pregnant.  We can’t wait for the government to do something, it is our village and we need to do something to make better lives.  For my life it’s not about having fancy clothes and what, what, it’s about my village and making it a better place, that is my main mission.”

G then got pensive and shared his thoughts: “To go into Africa , I think it will be quite a challenge because first I need to get some connections with other people before I leave South Africa.  Luckily we have another project, I think in Kenya, which is funded by the Laureus Foundation.  If I can get connected with them, then maybe they can make a suggestion of where I can start a project for them.  You wouldn’t know what you are going to meet along the way but as long as you are passionate about what you are doing then anything is possible.”

images (9)Wanting to get back to skate boarding for a moment I asked G if he was familiar with the concept of a Holy Grail. I likened it to surfer searching for the perfect wave or the fisherman and the fish that didn’t get away. “What is the Holy Grail for you as a skate boarder? Is there a moment in a skate boarder’s life when you say: ‘ah that was perfection.’”

G took me straight back to Indigo, as if trying to emphasise his main passion and the passion of Indigo Skaters:  “it’s not about skateboarding but how skateboarding can change a life.  This project started out just being about skateboarding but now it’s about changing people’s lives.  To me it’s about people who get trained to build some life-skills, to up-grade peoples knowledge and of course the kids.  Indigo up-graded my knowledge and now it’s time for me to give back to the kids.  I feel that if I wasn’t skateboarding I wouldn’t be having the life I’m having.  I was born in a township, not here, but I came here 15 years ago.  Whenever I go back to that place I see life differently.  I see the guys that I grew up with smoking and taking drugs.  I don’t think they have a future.  They used to be ahead of me but I thank skateboarding that it made me into a better person because I didn’t know what I wanted to be after matric.  We’ve got people around, people who have done matric but they are doing nothing.  There are fewer job opportunities and this is like bread to me because even at home I am the bread-winner, I am the one that is supporting and putting bread on the table since I do this project.”

I’m distracted by an ever-growing commotion behind us. Uproarious laughter, jumping up and down and very cheerful faces. T,  is leading a group of about 30 to 40 children ages, ranging from 8 to 18, in a game of Simon-says Zulu style. Although in Zulu it’s immediately recognisable to me as the children squirm, straighten and flap in response to the key words. Everyone is involved, no one is on the side lines and those who are ‘out’ are cheering on and laughing with those who are in. The little boy in me immediately wants to play too, but instead I take photos and enjoys watching the action catching the vibe of the crowd. Apparently each day there are activities like this or something similar to include all the local children and not just skaters in the camp’s activities.

I chat to an older woman who is watching from the side-lines vicariously taking part. She introduces herself as Kosi. I know everyone calls her Mama Kosi. We chat about the children and she tells me that she was very pleased the day Indigo came to the village. She lives adjacent to the property. Mama Kosi gives me a wide toothy grin and tells me how she cooks for the guests. I ask what she enjoys cooking for the foreign visitors. She responds with no hesitation:” Mngqusho en Mbotyi,” that’s samp and beans in English, it’s a traditional Zulu dish. The samp is made from crushed mealie kernels and the beans are usually sugar beans. Mama Kosi is a lady of few words but clearly likes it when there are guests to cook for.

I call it a day and we agree to continue the interview tomorrow. I drive on up out of the valley under a grey sky but with a spring in my step as some of the spirit of the camp has rubbed off on me.

On day two of my sojourn at the Indigo Skate Camp I  arrived on a fresh sunny morning with just the faintest wisp of cloud in the otherwise deep blue sky. The ramps are empty and quiet given that the children are all at school. The little collection of rondavels are not quite as silent as people are preparing for a day of work, smartening up the site and building the next rondavel.

G emerges and politely smiles and greets me. He is natural hospitality with a warm friendly face immediately putting one at ease. After some small talk I asked G if Dallas was on his own when he started this endeavour – or if there was a partner involved? G answers: “Actually, I can say that it was him (Dallas) from the start and I feel that I am living his dream I can say thank you to him for the partnership, because this is something that he wanted to do with the community and I think it worked out very well.  He had to eventually get funds from somewhere; ‘Element’ and then we used to be funded by the sports trust ”Laureus Sports For Good Foundation” now fund much of Indigo Youth Movement’s road show as well as some of the day to day running of the Skate Camp. The skate camp ensures up to 40 people for the village receive stipends and over 50 local children are learning to skate. The activities also include life-skills, exposure to reading, music and dance too.

Aware of how one can’t just buy and build on land in rural Zululand I asked if Dallas had to get permission from the local authorities and the chief. G explains: “To get this piece of land we spoke to the headman of this village and after the headman agreed you still have to go to the Chief. They give us permission to build this park on the land because they know it is for the good of the community.”

Having read up on the net that 74 per cent of skateboarders are male I relate my questioning of the girl spectators becoming skaters to G, also how they found that an hilarious concept.  G:”Ja, I can say that a couple of years back we had some ladies who tried on skating, and they skated good, it was just that they grew up and felt that they cannot skateboard anymore.  So now we are just grooming these small ladies but we have a special day to teach them.  We teach them how to balance and stuff– we’re still going to bring a balance board. It will take time but we’ll get there.”

I ask G if he has a story of someone who stands out for him that epitomised the Indigo Skate Camp?” G doesn’t hesitate: “There is, like my own story – I was born in 1988 in Mpumalanga Township and I grew up there as a township boy playing in the street and doing all those rough things.  We didn’t have a chance as children, we were always on the street, running around, breaking the rules.  But since I came here it was quite funny because we went down to the river and I didn’t know how to swim.  I couldn’t experience what they had experienced.  But strangely I gelled together with the life here and I think I came here at the right time because that’s the time Dallas came also with the idea of starting the skate camp and then it was easy for me to make new friends because we were all beginners by then.  I knew about skateboarding but I wouldn’t have tried if he hadn’t come around here, I thought it was dangerous and I thought it was for white people only.  I came here as a random normal child and they groomed me to be like a role model, but it wasn’t easy though, I had to go through some tough times.  There will always be moments when you have to come out of your shell and share your experience with other people.

But when I look back into my life I think that if I wasn’t skate boarding I would be in jail because that is where most of my friends are at the moment.  We all make decisions and sometimes it is hard to judge but I would like all of us to walk in the same pathway I am walking to try and change the world, although we can’t change all of it but to start from places like this valley of a thousand hills and then to take it to the next level.”

Many missionaries and churches and government programmes try to make a place for themselves, seeking acceptance in the Valley of a Thousand Hills. So I ask G what sort of opposition they have encountered from the community toward the camp.

G:”I remember about 8 or 9 years ago there was a guy who was good at skating and he was skating around here on the street and he had an accident and he was killed by a car so they wanted to stop everything.  They couldn’t stop it though because we were passionate about it and we told them that we weren’t going to skate in the street and that it had been an accident.”

Dallas was telling me that he wants this to be more than just a skate park, that he wants more activities and programmes. I ask G about the life skills programmes.

G: “All I can say is that it’s not just about skateboarding but what we want is maybe like 10 computers in our clubhouse and teach some IT skills to the kids while they still young so that they can grow up with some knowledge. We do also have our own life-skills manual where we teach the kids to work amongst the people and to work together as a group.  We talk about drugs and alcohol abuse.”

“We play games like icebreakers and we do these energizing things after stretching exercises, then we have a chance to include everyone. After lunch everyone can go crazy if it’s a skating day, everyone can do what they want, but if it’s the life-skills day, then after eating we will sit down and learn.”

“Normally, it’s not only me who does the life-skills we also have other skate coaches like T who also teaches life skills,  I am good with the older guys and T is good with the younger kids.  So we know what they want, and we know how to create fun amongst them, we know how to make them laugh.”

Matt: “What role do the people from overseas play – I see you have 2 young ladies here from overseas.  How often do you get people here from abroad?”

G: “We don’t often get people from overseas, and my own dream is to have this place filled with people.  These people that are coming here they have something that they have learnt back home and they want to take it to Africa. For example we have an art teacher like Natalie, she will be doing some classes with the kids soon.  It depends on the interest that you have something that you want to teach the kids and then we will create some space for you and then you do it with the kids.”

I explain the impression I got from the website (http://www.indigoskatecamp.co.za/) that the Skate Camp offers a skateboarding holiday, experiencing African culture, the bush, the food. Did I understand the Website correctly?

G:” You’ve got it right but it’s something more like a day trip where people come from the cities or from overseas, stay in town and can come visit us. For example: you see if you walk along the river you can see over this hill – the village and we will talk about the village because you can see a big rock, which is called ‘Isithumba Rock.’ The village is named after the rock, and we normally have some interesting stories which we tell them.  We introduce the visitors to the headman because he is living more like the style of the 80’s or the 60’s.  Most of the guys are more traditional here.  I have a friend who is a healer and I normally take them to him. And we tell them about the ancestors and why we have ceremonies where we have to slaughter goats and cows, that sort of thing.” Apparently skate camps are for kids aged 9 and 18 where they can stay for a few days at a time. There is often survival training and exposure to Zulu culture as well as visits to skate parks in surrounding towns.

I put it to G that skateboarding is perceived in South Africa as a pastime mostly for white teenage boys. What is Gs take on this? “Have you ever been under pressure from your peers to be spending time doing something more traditionally Zulu?”

“It doesn’t matter to me what I do, it only matters that I know my roots where I’m from.  It doesn’t matter who I hang out with, I can go and stay in London, but so long as I don’t lose my culture, my roots and where I from. I know this mentor from ‘Laureus’. He’s like the African Project manager who runs the ‘Laureus Sports For Good Foundation’.  He lives in London, but you can see he has never lost his roots, he knows where he is from, whenever he phones me he doesn’t appreciate speaking in English, and he speaks in Zulu. I don’t want to lose my ground and lose who I am, and when it’s time for my ancestors, I have to act traditionally, I have to act as I was born.  I know that we have some different destination, and they (the ancestors) know I have a different destination and they understand and are happy that I’m doing this, they know I’m getting something out of it as long as I respect them and know that they exist and know that they are still around making sure that I always go safely and do what I ought to do.”

I can see G is eager to get back to work. Dallas arrives in his pickup with cement and supplies for the day’s work party. I can see that he too is in work mode and I don’t want to disturb his rhythm. We chat briefly. I can see everyone is motivated and ready to labour.

I catch up with Dallas later and he explains all the activity: “We’ve had a push for more accommodation, to develop more hospitality skills.” The intention is to build more rondavels for the planned increase in accommodation for visitors and similar buildings to facilitate Dallas’ drive for hospitality training.

Dallas is animated as he tells me how volunteerism is the key to the future of Indigo: “We need more volunteerism. Locals enjoy interacting with the visitors. It enlightens and encourages the locals and they are amazed that these outsiders show an interest in their lives. So the big push is going to be for more structured interaction with volunteers so that they can feel directly engaged in the community’s life. “

Then there’s tourism. Dallas is focused: “everything from day trips to month-long stays. I see us developing trails, mountain biking and so on. We’re more than just the niche market of skateboarding, we’re also a playground. We want to create a kind of park and play situation… to be a place where you can park your car, ride your bike, have food – we can spray down your bike and so on, to be a hub of outdoor fun.”

Looking further into the future, Dallas considers the English language, IT, Internet studies and communication playing a role. One of the buildings I see being worked on is planned as a computer centre where volunteers can train local children in computer skills. But language is a key component of Dallas’ dream: “We can create something unique. Some people want the African experience – lets create a unique destination where you can learn English, sitting among African people. I’m trying to find ways of benefitting the community and also to create another reason for a person to visit, creating reasons beyond just skateboarding. Initiating a language centre can do that.”

Asked if there are more ‘Indigos’ down the road, Dallas explains that the situation at Indigo is unique and not likely to be replicated, however he does say: “I might consider the whole model elsewhere in Africa. We have considered Mozambique or maybe Uganda.  Of course we want to finish getting this thing (Indigo) running fully on its own. We want to see it generating its own revenue. I believe in two years’ time we’ll be there.”

images (11)Watching the skaters fly in the air and glide up and down the ramps I had to ask what the future holds for the guys who are just here to skate.  Dallas offered these thoughts: “I’m sure a few of them will become standout skateboarders and a few will be the next instructors, some will run the facility. The skateboard community needs to provide jobs for skateboarders and skateboarders need to run the skateboarding fraternity. I’m on a mission to create jobs. Guys will never stick with skateboarding if they are forced to go and sell hotdogs at the race track. I’m trying to create jobs that will keep them in skateboarding. I couldn’t find a job in skateboarding.  I created this place to create jobs and somewhere down the line guys will see me as a role model having created this entity. Skate and Create is what we’re doing, that’s what this is about -skating and creating.” As an afterthought he adds: “That should be the name of your piece!”

Two Cities Get Terminals

Durban Harbour

Durban Harbour with Mouth Widened

Residents of Cape Towns have been complaining for lack of one for years and Durbanites believe their city deserves one too. We are talking about cruise ship terminals. It’s in the spotlight as South Africa’s two largest coastal cities seem to be pushing for the same thing. The news came recently that there has been approval for both the projects to go ahead with new cruise terminals in mind.

One may ask what the benefits are. The Durban Port Authority sees a dedicated cruise terminal, close to the ports entrance, as a natural extension of the development around the Durban Point Waterfront. The idea being that this is the most sustainable way to interface the operations.

In Cape Town, Future Cape Website, claims that a ground swell of Capetonians have had the cruise terminal as part of a broader vision for Table Bay Harbour by 2040 in mind for some time. The potential of using the E-berth as the dedicated site for the cruise terminal seems an important part of their vision. Regardless, Transnet has finally given the go-ahead for building a dedicated berthing terminal for cruise liners in Table Bay harbour.

This is in the wake of last year’s decision by the Department of Home Affairs to ban cruise-liners exceeding 200m in length berthing at the V&A Waterfront, citing safety concerns. The move got well-to-do travellers a little bent out of shape as they had to condescend to the likes of the Duncan Dock at Table Bay Harbour.

In Durban the planned terminal will be operated on a seasonal basis in line with the cruise liner schedules, but to ensure an on-going stream of income during the off season, the terminal will double as a meeting, conference and exhibition venue.

The recent breakthrough of Vetch’s deal between the Durban Point Waterfront developers and water sports clubs will also see development towards the harbour’s North Pier, which has been closed to the public since the harbour entrance was widened. Planned development of hotels, restaurants, shops and other facilities will mean the public can enjoy views of the harbour’s entrance channel again.

Transnet claims that the development of cruise terminals in Durban and Cape Town came in response to the tremendous growth that the cruise industry had enjoyed in recent years. Cruise tourism was the fastest-growing sector in the global tourism industry, and was set for continued growth.

Queen Mary in Cape Town

Queen Mary in Cape Town

In Cape Town the plan is to complete the terminal within the next two years. Identifying suitable investors and operators is still in process. The development has been widely welcomed. Last year 19 visiting cruise liners brought approximately 11 144 passengers to the Western Cape which sustained a number of jobs in the tourism industry.

Opposition to the plan has often been centred on the competing priorities surrounding basic services, and the need for other areas of infrastructure which would serve broader Cape Town. But it seems that tourism will win this one since new jobs are a certainty in this regard.

No numbers are being bandied about yet by either Transnet or the port authority. However digging back to 2010, the ports authority boss Khomotso Phihlela told a press conference that an integrated cruise terminal in Durban could see an investment of not less than R500 million, and possibly up to R2 billion. This would include leisure and retail components, as well as a new Transnet office block.

Regardless of the costs it seems both Cape Town and Durban will see new terminals built. These will most certainly be another tool to bring in tourism to the two cities, boosting their prestige a little and causing a knock-on effect to commercial property value, certainly in precinct of the cruise terminals.

Durban beach front restaurant facilities remain vacant.

Vacant Facilities - Durban Beachfront (courtesy IOL)

Vacant Facilities – Durban Beachfront (courtesy IOL)

Back in 2010 there were pessimists and optimists arguing it out over the potential embarrassment or pride at the outcome of eThekwini’s plans to pretty up the beach front and revamp its facilities for international guests coming to town for the world cup. The optimist won, projects were completed on time and even the pessimist were impressed with the outcome. But alas three years later there remains a big nasty wart on the pretty beachfront’s comely face.

Last month the sustainable development and city enterprises department tabled a report before eThekwini Municipality’s Executive Committee (exco). In short the report confesses that the tender process for the beachfront restaurant facilities has failed.

The report reveals that more recent interest in the facilities leaves potential tenants unimpressed and dissatisfied with the tender process. The two main bones of contentions being: 1) Experienced restaurateurs consider the unfamiliar process to be excessively complex and lacking engagement, whilst, 2) Large retail property owners follow the public tender route for the tenanting of retail space because tenant mix is never left to chance. Exco has now responded by planning to approach restaurateurs directly.

The beachfront restaurant facilities costs the metro R64 000 a month for maintenance and security. Unfortunately the facilities have deteriorated due to neglect and vandalism and now need to be refurbished.

It’s not like the facilities are poor or inappropriate. There is a reasonable range of amenities with small kiosk-like spaces that could accommodate tuck-shops and curio/beachwear businesses which go for as little as R1000 to R3000 a month, to potential high-end and franchise ready facilities with monthly rents ranging from R40k for 300sqm of floor space to R60k for 500sqm of floor space. Commentators in the industry aren’t faulting any of that.

However when examining these rents one ought to take into account that trading is generally only while the sun is up, from roughly 6am to 6pm. People don’t feel safe to come down to the beachfront at night. If the city wants to attract restaurateurs they are going to have to, cut the red tape, improve security, and bring rents down so they can make a profit and be willing to put their roots down.

There’s no argument about the Durban beachfront infrastructure – it’s world class. What’s required for beachfront restaurants to work is to get large numbers of people down en mass. Although the rents seem competitive compared to higher priced shopping centres, it’s the sheer volume of the foot traffic that a shopping centre can offer that compares.

There is something very discouraging to potential investors in local property and that’s a white elephant. In short the bureaucratic nature of the tender process is partly at fault for their empty structures and eThekwini will have to give potential patrons a reason to go to the beachfront at night for the facilities to seem viable to prospective restaurateurs.

Durban’s Playground Continues to Expand

An aerial view of the Natal Command site and surrounds.

An aerial view of the Natal Command site and surrounds.

The Durban Beachfront will never be the same as 2013 sees yet more changes to the landscape of the holiday city. A local Movie producer won his court case over the Natal Command headquarters last year and the Save Vetch’s Association called a truce with developers over water front developments recently. 2013 will see Durban’s playground getting a little bigger.

A legal dispute had been underway for over 9 years over the Army’s old Natal Command site, where many a young Durban man coveted a posting during his national service. In short the city sold the land in 2003 to local movie producer Anan Singh’s Videovision Entertainment, now Rinaldo Investments, for R15million. At the time the plan was to build a film studio.  The 21 ha of land is currently valued at R400million.

The dispute with Pietermaritzburg entrepreneur Sunny Gayadin has recently been resolved. This isn’t the only legal fracas in which Gayadin has been involved of late; he is also disputing the sale of a property adjoining the Pietermaritzburg’s Liberty Midlands Mall.

An aerial view of the Natal Command site.

An aerial view of the Natal Command site.

Durban ratepayers have been up in arms for some time about the neglect of the Natal Command site and the fishiness of the transaction.  The deal was criticised as being political, rate payers claim to have lost out due to the land not being sold for its true value. In the end the Constitutional Court made a unanimous, comprehensive judgement by the full bench of the 11 judges in Singh’s favour, dismissing an appeal against a decision of the Supreme Court of Appeal (SCA).

Right from the outset, apart from a film studio, a hotel has been planned. The land is perfectly positioned.  The site is across the road from popular Sun Coast Casino and near the Moses Mabhida Stadium.

The Singh’s Video Vision website reports that they would have to revisit plans for the site since some time has lapsed since the original concept. Some are speculating that an experience like Universal Walk in Universal studios or other theme park ideas could come to fruition. Singh has made it clear before how the project had the support of the city making it a viable option all along.  Tourism and entertainment will be the biggest spinoffs for the city.

Latest from Video Vision is that the development should take five to six years. At the time of the initial sale the development was reported to the press as R1.5billion. It seems no one is speculating as to how much the final cost will be.

The ratepayers association has made it clear that it has little confidence that the city could run such an operation and that it would be best if Singh just got the movie studio going, paid rates and created jobs.

There’s no doubt that a theme park would complement the current Beach Front Walk, Moses Mabhida Stadium and uShaka Marine World as well as the Sun Coast Casino.

This brings us to another dispute. The Durban Point Development Company (DPDC) an equal partnership with Malaysian based Rocpoint group and the eThikwini Municipality, the Save Vetch’s Association (SVA) and the Durban Paddle Ski Club have made a combined press statement to say they have “ceased hostilities” and have come to a compromise settlement on how the Vetch’s Beach is to be developed as part of the on-going Point Waterfront Development.

SVA and the Paddle ski Club fought the development on the basis that they believed it would shut out the community from the beach and destroy the diving reef. The compromise plan should save about 200m of the beach in question and still allow the DPDC to go ahead with its ‘super basement’ which will form part of the phase one of the development.  The new club site will have direct access to the beach, with 4×4 vehicles and trailers will be able to park on it. The public will have access to the beach and Vetch’s Pier with all the marine life remaining unaffected.  No hotel will be built alongside Vetch’s Pier. All categories of sailing craft will be able to launch, either from the beach or from a hard and sheltered slip-way. Not everyone is entirely happy but not everyone is entirely dissatisfied – such is compromise.

Developing Durban continues to be in line with the city’s claim to being South Africa’s playground. But not every development is easy to set in motion as the above investors have discovered.

Umhlanga Continues to Expand

Aerial view of Umhlanga Ridge (foreground) and Umhlanga Rocks (on ocean beyond) Wikipedia

Aerial view of Umhlanga Ridge (foreground) and Umhlanga Rocks (on ocean beyond) Wikipedia

The greater Umhlanga commercial/mixed development space continues to grow in both sophistication and property. While other similar nodes in the country consolidate or taper off, Umhlanga development seem to be on track.

Recently property developer Vejan Pillay’s Misty Blue Investments launched its 6th major development in 10 years. The development is a multimillion-rand residential development nick-named ‘Central Park’.

Central Park is situated besides the landmark Umhlanga Porsche dealership and another of Pillay’s projects, the R150million Urban Park mixed use development near the Parkside precinct.

It’s clear that the focus in the last few years has been the development in front of Gateway and around Parkside, but these developments of Pillay’s are likely to be a catalyst for development around the Porsche dealership which overlooks the N2. Direct access to this location from the highway is planned and includes a new interchange.

Central Park is to be developed over two phases: phase one will be made up of 177 residential units hugging a park area with a running track. Other features include an in-door pool and the uniquely designed vehicle access to apartments feature.

This all comes on the heels of the recently opened mixed use Urban Park and Spa with its 92 room,  four star hotel, 159 residential units with commercial and retail outlets planned for the lower levels. The hotel is situated on the corner of Meridian Drive and Umhlanga Ridge Boulevard. The hotel is managed by the Durban based Three Cities Group that manages The Square Boutique Hotel also developed by Misty Blue.

The word on the street is that there is still a huge demand for residential flats in the area, the twist is that it is estimated that up to 60% of the buyers are investor buyers looking to rent out the properties.

On the horizon, and expected to be completed by mid-2014, is the Gateway Private Hospital. Construction has begun already on the corner of Aurora Drive and Umhlanga Ridge Boulevard within the Umhlanga Ridge New Town Centre. The 160 bed hospital will be equipped with six theatres, an ICU and high care facilities. The focus will be on high-end specialties. A casualty, pharmacy and various out-patient facilities are to be included.

Beacon Rock is another development recently opened, situated at the entrance to Umhlanga Village. The mixed use building offers a variety of top brand restaurants as well as a Mini, Rolls-Royce and Aston Martin showrooms. There are also 24 luxury apartments with exquisite sea views.

You can’t keep the town down; Umhlanga remains a force to be reckoned with in the greater Durban landscape.

Gateway & Umhlanga Ridge

Gateway & Umhlanga Ridge

 

 

River Horse Valley Estate, a Durban Success Story

River Horse Valley

River Horse Valley

A pristine valley stocked with Hippos, Elephants and Waterbuck descended down the slippery slope of pollution and neglect as ‘civilization’ crept north into what is now Riverhorse Valley. Today some of that environment is being restored as a precondition to the establishment of what has become The Riverhorse Business Estate.

Investors are patting themselves on the back as River Horse Business Estate North of Durban appreciates handsomely in the midst of a slow economy.

The Estate is a Joint Venture between the eThekwini Municipality and Tongaat Hulett, the first thoughts of which go back to 1994. Now over 150 businesses are established in the area.  Today the 300 hectares that make up the unfenced Estate consist of 160 hectares of developed sites and 142 hectare to reclaiming green spaces.

Strategic Planning Services, responsible for a recent report commenting on the green aspects of the Estate, proclaimed that the development is without national parallel.

Trevor Pierce Jones of management company SID Urban Management (PTY)Ltd, reports that 17 000 people are employed across the estate with a permanent workforce estimated at 12 629 of which 4249 are new jobs augmented by a contract work force of over 4400.

The Estate is contributing over R80 million in rates annually, far above previous expectations. 61 per cent of the 90 per cent of companies interviewed in the 2012 socio-economic impact assessment, said they had moved to the estate from else where in the city, 22 per cent suggesting they had outgrown their existing premises, 7 per cent are new businesses.

R200 million was spent on establishing and serving the estate, two thirds of which was from eThekini. The 2012 valuations roll values the properties at and estimated R3.2Billion.

Spin off developments include the upgraded Queen Nandi Drive, the forthcoming rehabilitation of 41 hectares of wetland, a R750 000 indigenous tree planting programme and the addressing of public transport issues.

The bulk of the development consisted of the creation and cutting of developable platforms for the various Erven and careful consideration and survey was conducted to ensure that all sites were above the 1 in 100 year flood plain level.

Infrastructure developments include the construction of 2 new bridges over the N2; the construction of 2 new bridges over the Umhlangane River; the creation of 7 new roads and the diverting of the Umhlangane River.

The

Riverhorse Valley Business Estate

Riverhorse Valley Business Estate

Management Association now administers an area of 304 hectares comprising: developable industrial, commercial and mixed use activities – 150 hectares; internal road reserves – 13 hectares; Umhlangane river and flood plain – 78 hectares; Huletts Bush – 37 hectares. The above areas exclude the N2 freeway, Rail reserve, Total petro-ports, Queen Nandi Drive and Newlands East Drive.

To quote one example of happy investors, Shree Property Holdings brothers Pavan and Mayur Shree say: “As leaders in Grade A warehousing, we simply couldn’t ignore the opportunity. We bought three prime properties – two in the front of Builders Warehouse and the other next to the Unilever site, we began developing immediately.” One of these sites was snapped up in an adroit sale while the others were subdivided and leased off relatively quickly.

 

 

 

Do you want to invest in Westville? – You should!

University of Natal - Westville

University of Natal – Westville

Given the green leafy suburb label associated with Westville one may not consider it a node for commercial property, well that’s just not true.

Westville businesses can be found in prestigious office parks across the area. Westville’s commercial properties are in demand and its shopping malls are frequented by shoppers across the greater Durban area and beyond.

Westville is located approximately 13km west inland from the city centre of Durban. With the M13 running through it, Westville is on the route of the world-famous Comrades Marathon between Durban and Pietermaritzburg. Traffic flows steadily through the area which is bound by the N3 and M19 highways making Westville easily accessible for commuters based in Durban, as well as those from the southern and northern regions. This serves to make it a popular base for corporates that service these regions. Westville offers good infrastructure such as shopping malls, top schools, university, sporting facilities and medical services.

A decentralised hub west of Durban, Westville was named after Sir Martin West, Lieutenant-Governor of Natal in the mid-19th Century. Originally a farming area, his farm was transformed into this upmarket residential area, which has expanded and developed into a commercial market.

From a business perspective Westville is an established area that hosts long term tenants. Commercial and retail space is in high demand, especially due to the convenient accessibility to the Durban central business district and surrounds.

Pavillion Mall

Pavillion Mall

The Westville area has a mix of retail and office properties. There are three notable shopping centres, namely The Pavilion Mall at 119 000m², second only in size to Gateway in the Durban area, Westville Mall at 12 793m² and the relatively recently completed Westwood Mall at 34 940m².

One can neatly divide up Westville into four distinctive commercial zones: Westway Office Park, beside the N3; Derby Downs, north of the M13; Essex Terrace between the M19 and the N3 and Westville Central. If one was asked for the zone that stands out it would have to be Westway Office Park – it is in very high demand due to its proximity to the super-regional Pavilion Shopping Centre, accessible public transport and high visibility from the N3.

Featured in a recent Broll Report, Westway Office Park is a fine example of the strides commercial property is making in the area. When complete the office park will release 19 000sqm of AAA office space, highly visible to the N3. There is a parking ratio of five bays to 100sqm of space. Even small retailers are to be included with a coffee shop and a landscaped park.

Westside

Westway Office Park

According to Broll research, rentals have risen consistently achieving a high of R130/m² toward the start of 2010. In the second half of 2010 rentals fell to R120/m² and are holding steady at this price. Vacancies achieved highs of 19% in 2005 and then fell to 6% at the end of 2005. Since then, vacancies have swung back and forth, falling to 0% in the second half of 2007 before climbing to a current 9%.

In short, Westville commercial property demand, sales and supply are up. Space in demand is between 120-600sqm. Highest rentals are pegging at R135 per sqm; medium rentals at R100 per sqm and the lowest are at R75 per sqm. The scope for growth is real and demand is being met. [Stat Source: Broll]

Hilton Buy-to-Let – Opportunity Knocks

Hilton College, synonymous with the town of Hilton, caught headlines earlier in the year for its announcement that it plans to sell off a substantial bundle of its estate for a housing development.  Since the school claims it’s in no financial difficulty one can’t help feeling if the time is right to invest in the small but prosperous town.

One may ask, ‘what do they know that we don’t’. Hilton’s trustees have made available 100ha of prime land for an exclusive residential estate expected to net at least R90 million when complete. The school spokesman told the press that it all had to do with the school becoming prohibitively expensive at R190 000 a year and how it needed to be more relevant and offer opportunity via bursaries to the previously disadvantaged.

The Gates of Hilton, as the development will be called, is not about charity, it’s about some very wise investing as Hilton sees itself become the target of people moving up the hill from Pietermaritzburg and even Durban. The first 50 sites of The Gates of Hilton have already been made available to those with connections to the school.

Not far away is Ambarlea, an excellent rent-to-buy residential development, more than 40 units of which have recently been sold. Gated communities are so commonplace that they are springing up unnoticed. Ambarlea offers automated access control and palisade perimeter fencing. Hilton has long been regarded as an upmarket residential destination, with a wide range of quality family homes but very little suited to first-timer buyers, investors or retirees. Developments like Ambarlea are offering one and two bedroom apartments, among others. Entry level pricing is at R595k at one bedroom, the two bedroom apartments are priced at R850k. The complex is within walking distance of the village, hence the buy-in from Hilton College parents, young professionals, retirees and investors.

Champagne air and cooler summers lacking the humidity of the coast, spacious properties and abundance of good public and private schools, including Hilton College and St Anne’s, this is a location which is ideal for healthy family living or entertaining in country style. Security is an increasing need among home buyers, which makes the freedom of a village such as Hilton and its low crime profile so desirable.  Houses with large well-kept country gardens on stands of 2000sqm are available as an excellent buy-to-rent opportunity.  Prices range between the R1.4m to R2.5m mark.

With the upgraded Oribi Airport in Pietermaritzburg so easily accessible and today’s advanced technology and connectivity, they are also finding that more residents choose to live in Hilton and commute on business to other areas and regions, including Gauteng. Gateway to the popular Midlands Meander, Hilton is only an hour from the Drakensberg Mountains and 10 minutes from Pietermaritzburg.

Other developments in the Amber –range are Amberglen,  Amber Valley and Amber Ridge offers a range of unit options and pricing within a secure and picturesque environment.  Also on the buy-to-rent list of opportunities is Amber Ridge, the latest of nearby Howick’s popular “Amber” retirement villages. Since its late 2011 launch, 65 of its intended 200 units have been sold, with first occupation having taken place in May 2012. While a separate village in its own right, with its own body corporate, frail care, community centres and wildlife conservation area, it will share these facilities with its neighbour, Amber Valley. In turn, Amber Ridge residents will have reciprocal access to Amber Valley’s facilities, which include a large frail care unit, two heated swimming pools, a library, communal dining room, snooker room, various function rooms, a gymnasium, a pub, Astroturf bowling green, two tennis courts, bass and trout fishing dams, and walks in the designated game estate area.

Hilton is clearly emerging as a property investment magnet with everything from small units, gated communities and grand old homes with bed n’ breakfast potential to retirement accommodation.

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Ballito Bay Bursting at the Seams

So you thought Ballito bay was just a holiday town in a quaint sugar cane-growing patch on the North Coast of KwaZulu-Natal. Think again.

Ballito remains an ideal holiday destination with fine weather and beautiful vistas but it also has a growing business district, excellent private schools and several top class shopping centres, cinemas, hospitals and hotels.

Macro level infrastructure is having a big impact. The combination of the King Shaka International Airport to Ballito combined with the Gautrain in Johannesburg mean a greater number of Jo’burgers are taking advantage of the ease with which they can commute. Real Estate agents report the increased numbers of people moving to Ballito from Johannesburg looking for a better quality of life and lower crime levels.

Ballito Bay Bursting at the Seams

Ballito has also become a residential destination for Durbanites and others from KwaZulu Natal as jobs increase along the North coast. Big developments like Bridgecity, Dube Port and the giant Conubria development are attracting permanent residents to the North coast areas. These are not once off events. Rather they have inertia of their own as they attract further development and support business. Many are looking to Umhlanga and Ballito to reside as the retail and commercial sectors grow.

For some time upmarket Zimbali and Simbithi have attracted the sales at the higher end of the market but other gated communities are growing and entry level prices are ranging from R780 000 to R1million. Similar to Umhlanga though buyers believe that Ballito is a sound investment over time that will increase in value. Regarding frontline properties, many of these are being financed with cash or small bonds, the level of confidence in the area is clearly growing.

Ballito’s light-industrial growth shows the potential of a future city. Last year saw the launch of Ballito Services Park North which brings on line 9 light industrial zoned serviced platforms totalling 18.5 hectares offering multi-use options from warehousing and factories to show-rooms, offices and mini units. With a scarcity of zoned and serviced land for sale north of Durban and around King Shaka Airport, this opportunity is very attractive.

ComProp, a leading local property management group, researched and concluded that  a broad range of tenanted investment properties in Ballito are yielding an average of 5.95% income return in the first year. From a capital growth perspective, property values in the area were not heavily influenced by the recession and vacant land prices have continued to grow in value. Given that there are only 112 serviced sites available between Ballito Business Park, Ballito Services Park and Imbonini, northern business land will soon be difficult to acquire.

There is debate about infrastructure in Ballito in that much has made of the well-kept and designed roads among other micro imfrastructure. Crime and grime are said to be at a minimum. However holiday makers in December last year expressed a great deal of frustration with traffic and water resources. Those who saw the lines of holiday makers queuing up for water to flush their loos last December may have written off Ballito as another South African town that can’t get its act together.

Ballito’s biggest shopping centre, Ballito Lifestyle Centre’s Bruce Rencken said to local newspaper North Coast Courier during the water crisis: “Although the water crisis was unexpected and disruptive to our operations during our peak trading period, we were able to continue trading and brought in water tankers and chemical toilets. Fortunately the customer shopping experience was not significantly affected and customers were generally very understanding. Nevertheless, there certainly was a negative impact on trade and the ‘holiday experience’ of our visitors. Hopefully this has again highlighted to the authorities the importance of and urgency with which all infrastructure upgrades are effected and implemented as this is fundamental to sustainable and responsible development in Ballito.”

Many unexplained and unaccounted for power outages occurred during the December/January period. Umgeni Water warned in October last year that massive industrial and residential development north of Durban was putting pressure on the provision of water. At the time of the crisis the utility said it had plans to upgrade the infrastructure in 2012.

Mayor Sibusiso Mdabe has gone on record as saying R2.2 billion would be needed to upgrade the water supply to Ballito, a disclosure that has made residents hot under the collar at the prospect of a rates hike to fund the infrastructure.

In the not too distant past 15% of a developments cost would go towards upgrading the infrastructure of the area, thus creating a sustainable system of development. This is how the old Ballito was built. Some locals are of the opinion that Irregularities began when this levy was dropped, thus allowing a huge amount of housing to be built without the required infrastructure. This has slowly compounded to cause the water shortages being faced today. Some argue that had the new housing in the region been catered for, the community would not be facing these problems.

iLembe district municipal manager, Mike Newton, has said that, provided there were no external problems such as severe weather or electrical breakdowns, there would be no need for residents to panic this year.

Mike Newton said to the press that “The team from Umgeni Water is busy constructing an additional supply pipe to the major supply reservoir to deal with additional demands of this nature, as well as upgrading the pumping stations from Hazelmere Dam to supply the additional requirement.”

Umgeni Water has assured residents that the infrastructure required to improve supply to the Avondale Reservoir would be in place before December 2012. So watch this space.

There’s no doubt that if Ballito can overcome its infrastructure hurdles its boom is expected to continue both commercially and residentially. Watch out Umhlanga.

Chinese Retail Booms in Durban

Dotted all over Southern Africa the little Chinese spaza-type shop is now part of the landscape. But in the cities many Chinese traders congregate in what is known as China Towns or China Malls. Although not new to South Africa, China Malls are booming in South African cities and are now flooding Durban, for some noteworthy reasons.

The Chinese community in South Africa can trace its origins back to the 1800 when labourers came to work on the mines in Johannesburg. During apartheid days Chinese were referred to as non-whites except for those from Taiwan who were given the dubious classification of ‘honorary whites’. Visas were tight in the pre 1990 days but now we have what’s being called the Shin Qiao (New Chinese) migrating and working here.

Johannesburg has been associated with the South African Chinese community for some time. But recently Cape Town and Durban have seen growth in Chinese traders in their retail districts. In Cape Town a third China Town shopping centre has opened in Voortrekker Road in Parow recently. There are another two in Ottery and Sable Square. This makes up just less that 200 shops with more planned in phase two at Parow.

It is estimated that there are as many as 50 000 ‘new Chinese’ in Durban as well as up and down the coast running shops of various kinds. Two new Chinese owned-and-run malls opened in Durban in 2011: China city in Springfield Park housing 150 shops and the extensive Oriental City Mall in the city on the corner of Anton Lembede and Mahatma Gandhi.

As early as 2010 the old and dilapidated The Wheel shopping Centre was re-opened as a China Mall. What was just a string of Chinese shops has now taken over two floors with every kind of ware available for the bargain hunter. Management is eyeing the third floor now for even more expansion.

Anthony Lee, manager at China City, quoted in Business in Durban Magazine Autumn 2012, says the port is a big draw. “Goods arrive here in Durban. They used to go to Johannesburg. More and more Durban is being seen as the place to do global business. “

Yinbiao Hao, spokesman for Durban’s Chinese Consular General, quoted in Business in Durban, said “Security is better. (In Durban) The police service is better. There is less bribery here.” Hao says awareness of Durban’s better governance has made the city a viable business option among Chinese businessmen.

Those in the office of Durban’s Chinese Consular General’s office believe events like the 2010 world cup and Cop17 have put Durban tourism and business on the map of Chinese commerce. Many Chinese hadn’t heard of Durban before these events and now marvel at the city’s reputation among the Chinese community in South Africa for its good governance.

Chinese Journalists covering Cop17 developed the motto: “Durban the perfect city for people to live and stay.” Now that’s publicity that’s hard to buy!

The Dig-out Port and the South Durban Basin

Yes you heard right, the speculation is over, the deal is through, Transnet has bought the old Durban Airport site for R1.8 billion. But that’s nothing compared to the investment of an estimated R100 billion over the next 25 years for the vast engineering job that will employ 20 000 people to accomplish it’s task.

 

The plan is for Transnet to create a whole new terminal with sixteen container berths, five automotive berths and four liquid bulk berths.  To give you an idea of the size of the operation, the port of Durban has the following Terminals – Durban Container Terminal, Africa’s busiest (seven berths), Pier 1 Container Terminal(eight berths) , Multi-Purpose Terminal (also known as the City Terminal- 14 berths), Durban Car Terminal (three berths), and Maydon Wharf Terminal (fifteen berths). (Source KwaZulu-Natal Dept. of Transport)

 

The whole development is intended to reach completion by 2037. But for those who like instant gratification, the first phase should be finished by 2019 at a cost of R50 billion. That causes one to wonder though , if it takes seven years to spend R50 billion and the project is due to continue until 2037 then that’s another 17 years to spend the other  R50 billion. Interesting, watch this space.

 

This news comes on the back of the governments R21 billion infrastructure upgrade for the Durban port over the next seven years.  The dig-out port though will ensure the doubling of the capacity for Durban as a container port, enforcing it as the largest in Africa. Durban already moves 67 per cent of the country’s container traffic flows through its port.

 

The Independent on Saturday quote Safmarine’s Southern Africa cluster manager, Jonathan Horn, as saying that a bigger, more effective port will help shipping lines such as Safmarine, improve transit times, service reliability and vessel turnaround, while offering the benefits of increased efficiencies and flexibility.

 

The result of the combined existing port and dug-out extension is that Kwazulu-Natal in particular and South Africa in general has a strategic asset, “an effective platform for forging trade linkages between provinces within the country, with neighbouring states and the rest of the world – particularly the Asian and South American subcontinents – offering the province considerable investment spin-offs and opportunities.” The Daily New quoted Ndabezinhle Sibiya, spokesman for KZN Premier Zweli Mkhize.

 

The implication for property in the area is huge. Already land sales are booming in the south Durban basin. The south Durban basin is already the second largest contributor to the country’s economy. Gauteng is the largest, making up 34 per cent of GDP, and KZN is just under 17 per cent of GDP. Transnet’s dig-out port indicates a catalyst for economic development for the city, the province and the country.

 

The Independent on Saturday quotes Keith Chetty, a commercial real estate manager at Lighthouse property group as saying: “The demand for commercial and industrial property has increased dramatically in recent times in and around the current port.”

 

Residents living adjacent to the old Airport would be hoping to get a pretty penny for their homes especially since land is in short supply around the old airport area. One may ponder what will become of the old Clairwood Racecourse site.

 

Not everyone is dancing for joy though, business owners in the path of the expansion for one. There may be a need for some PR damage control by Transnet with locals too.  The Independent interviewed several ratepayer organisations in the area and there seems to be a definite mistrust and disappointment at the lack of communication form Transnet. A point has been raised that some communities in the area were the product of forced removals during the apartheid era, a lack of transparency by Transnet and local government could result in some short to medium term instability in the area.

 

The municipality needs to inform residents that the area surrounding the old airport will be rezoned industrial to accommodate the expected demand for land once the port construction begins.

 

There is no doubt that one of the most important spinoffs from the dig-out port will be jobs. In addition to the 20 000 direct jobs claimed, an additional 27 000 ‘indirect’ jobs are asserted with 12 000 sustainable, operational jobs which will remain upon completion for the project.

 

There are naturally pros and cons, but there’s no doubt the Dig-Out Port is fait accompli and together with the new Dube Port and Richard’s bay port, the KZN coastline and its arterials are likely to be a very busy place for some time to come.  Edward Gibbon wrote “The winds and the waves are always on the side of the ablest navigators.” Let’s hope Transnet has done its homework.

Cycling and the Construction Indaba in Durban

Good news from Durban as it talks shop and continues to extend its facilities for recreation. Cycling and construction are on the agenda.

 

The big Construction Indaba was not as dull as it sounds. With all the construction going on around the city of Durban, infrastructure projects, commercial and retail space and housing development it makes sense to see who’s who in the greater scheme of things. The purpose of hosting this event was for the Municipality to address the issues that were revealed by the Construction Research that the Municipality had conducted in 2008.

 

The research indicated skills shortages, inadequate access to capital and poor availability to information as the most pertinent matters affecting the accomplishments of emerging businesses in the City’s construction industry.

 

The Construction Indaba was aimed at empowering emerging and established contractors to become self-sustainable and as well as help them through the industry’s most common difficulties impacting negatively on business growth and sustainability.

 

The result was much Indaba about access to funding, BBBEE, Training Facilities, Supply Chain Management as well as legal matters. The difficulties noted in the Indaba revolved principally around access to finance and the accessibility of business opportunities. There seems to be a satisfaction all around that voices are being heard and expression was healthy and constructive.

 

The municipality plans to host workshops on the raised issues in partnership with financial institutions in an attempt to bring resolution. Furthermore the Municipality is planning to host more training sessions to assist delegates with skills development. The Indaba will be an annual event at the request of the participants.

 

And just when you thought it was unsafe …. Enter the City’s “non-motorised transport plans”, which will eventually link Durban to areas such as Umlazi, Kwamashu and Umhlanga.

 

But there’s a bump in the road. A cycle lane across the Ellis Brown Viaduct of the M4 Northern Freeway bridge has been under construction for several months, resulting in a nasty traffic snarl up with various lanes, and at one stage the entire highway, being shut at times whilst the new cycle lane was under construction.

 

Alas the wheels of bureaucracy grind slowly. The City is still waiting for a “final record of decision from the provincial department of environmental affairs for the construction of the ramps that will lead on to and off the bridge.” Huh? This means that the bridge section of the cycle route may not be opened until ramps are created at each end. Apparently we have to wait for May before permission is granted.

 

The whole route ranges from the Blue Lagoon to Riverside Road. Cyclist are currently stopping at the lane, which has been cordoned off by a concrete post, and tentatively cycling on the road past traffic to get to the other side. Not an ideal situation.

 

On a positive note, Greg Albert, chairman and secretary of the Cyclesphere Cycling Club in Morningside, said that the bridge looks amazing. “We have seen that it has been completed and it’s looking great; we can’t wait for it to open,” said Albert to the Independent on Sunday. He said once the bridge was opened to cyclists, it would encourage more social cyclists and families.

 

Ultimately the cycle lane should end at the Bird Park at this stage. Other cycle lanes include those extending along the beachfront and around other important city attractions. Most of these tracks had been established in time for the Cop17 conference and had cost the city upward of R6 million. Interestingly enough the City contributed about 30% to the budget of the tracks with the rest coming from international donors: the German government and the UN Industrial Development Organisation

Other possible cycling routes under discussion include a 2km pathway to allow pupils to cycle from Albert Park to schools in the Addington area. Looking into the future, the city intends  to make option to commuters  to cycle or walk to work in the CBD by offering “park and pedal” districts. Similarly the new rapid bus and train points will be a focus for future “park and pedal” facilities.

There’s always something positive and constructive going on in the City of Durban.

 

The Port is Alive with the Sound of Investment

In one month President Jacob Zuma has opened Kwazulu Natal’s Dube Trade Port and the Eastern Cape’s Ngqura Port. But some of the biggest investment in South African ports is happening at the Durban Port.

 

National government has declared that it will spend R21billion on the infrastructure of the Durban port over the next seven years. This allocation is part of the R300bn of transport and logistics projects that President Jacob Zuma mentioned in his state of the nation address.

 

Even though Transnet has spent the last 12 years building the deepest container terminal in sub-Saharan Africa at Ngqura near the Coege Industrial Development Zone outside Port Elizabeth, this does not diminish the need to raise Durban port’s capacity to 5-million 20-foot-equivalent containers a year, from 2,71-million last year. Durban, Africa’s biggest container harbour, handled 61,7% of all containers that moved through SA’s commercial ports last year.  Shipping firms among other transport operators have been grumbling for some time about the inefficiency at the port.

 

The dug-out port project, south of the port, adjacent to the Durban’s industrial heart, was proposed nearly two years ago when options were being mulled over regarding the site of the old airport. It involves spending about R50bn in the first of four phases and was deemed necessary because economic forecasts showed the existing facilities would be inadequate.

 

Durban Chamber of Commerce and Industry CEO Andrew Layman said: “With a project of this magnitude, the sooner we get going the better. The issue of uncertainty bedevils investment.”

 

One project at the port which hasn’t been delayed is the R256m project to provide two more truck staging areas capable of facilitating 136 trucks, and a new four-lane dual carriageway, among other facilities, is 68% complete and is expected to be finished by July this year. This bound to bring relief to customers and truckers alike.

 

Also progress has been made deepening the berths on Maydon Wharf to facilitate large ships to use the berths for the first time and improve ease of navigation. This project, the estimated cost of which stands at R1,6bn when complete, is expected to be completed by year end 2014. Plans to deepen several container berths at the Durban Container Terminal on Pier 2 were well underway. The Island View oil and chemical product berths were undergoing an upgrade too.

 

It goes without saying what the knock-on effect is on other industrial and commercial property adjacent to the port or in the city in general as these developments progress.

 

Of course that’s not all that’s going on down at the port: Ranking as one of Durban’s largest leasing deals of its kind in the Durban port area, Growthpoint Properties Limited, the guys who bought the V&A Waterfront, has concluded a transaction with Bidvest Panalpina Logistics (BPL) for 20,767sqm of prime light-industrial space in Rossborough, near the Durban Port, in a deal valued at over R52 million.

 

Bidvest is a large consumer of Growthpoint’s commercial accommodation across the office, retail and industrial sectors. Similarly, Growthpoint is a major client of Bidvest’s services. It’s reported that the biggest challenge of the project was the timeframe. Construction of the redevelopment began in March this year for BPL to be fully operation by November 2011. Growthpoint’s industrial properties in KwaZulu-Natal are valued at nearly R1.3 billion with its entire portfolio in the province totalling some R4.2 billion in value.

 

Coming on the heals of the news that Mombasa and eThekwini are to be sister cities it’s encouraging to see the private sector, local and national government work as a team to keep Durban’s port and environs current. Looking into the future is going to secure the port’s role in the present as it play’s it’s role in the economy of the city and country as a whole.

Durban’s shouting: “Look at me, look at me, look at me.”

Look at me, look at me, look at me.

 

After the successful holiday season, Durban isn’t letting the limelight fade any time soon.

 

Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. Since before the 2010 world cup Durban has been as industrious as an ant farm digging things up here, laying paths down there. New and renovated concourses. A flurry of new restaurants. Sprucing up the informal trading areas. Laying on the recreational facilities.

 

It seems like yesterday that the Durban streets were awash with green fingered types taking a break from the, what turned out to be, highly successful Cop17 conference – well, from an organisational point of view anyway, ahem.

 

But just when residents thought it was safe, the City eThekwini plans to host a R31million Top Gear festival in June.  It materialised early this year that the ANC-run municipality and the provincial government had signed a 3 year contract for the festival that is to arrive in Durban in June, with municipality and the provincial government expected to carry the financial burden. Oops Durbs is beginning to look like seriously high maintenance.

 

This comes in the wake of Auditor-General Terence Nombembe’s report for 2010-11, which showed that 364 tenders worth R126m were illegally awarded. Democratic Alliance councillor Tex Collins said the provincial government had signed the Top Gear contract without consulting the municipality. Apparently the event does not submit to the goals of eThekwini’s  integrated development plan. Alas there is simply no provision for the festival in the city’s budget.

 

Opposition parties are hardly shouting yippee at the thought of fast cars and all manner of techno-wizardry gracing the Durban shore. The DA’s Ronnie Veeran said councillors battled to find money for infrastructure in their wards, and asked how the municipality had found the funding for the event so readily. He also said that the tickets of R250-R500 were too expensive for the average Durbanite. The minority front suggested building a permanent race track.

 

At the end of the day ANC councillors played the familiar tune that the Top Gear festival was similar to the 2010 Soccer World cup or Cop 17 in that such events brought extraordinary revenue to the city, hotel industry and allied tourism industry. The event is expected to generate an estimated income of R35 000 000 in the City’s hospitality industry. R26 000 000 will be spent on local suppliers and legacy programme. How those figures are arrived at is little mysterious though.

 

Apparently the deal was struck in December last year and the city is bound by the contract – so all the debate is academic. It’s a bit like dad spending all the grocery money on booze – you might as well enjoy the party.

 

On a more constructive note though Durban’s place in the sun is keeping it in the public eye for a very green reason.   Pioneering the way for cleaner energy in South Africa, three partners have come together in a cutting-edge energy-saving pilot project. Durban is the city chosen in this project aimed at harnessing  the power of solar energy.

 

It’s called The Lincoln on Lake Rooftop Solar Project. The three main players are: Growthpoint, South Africa’s largest JSE listed property company; Hudu, a pioneer in the world of Solar Power and the world’s largest solar panel manufacturers Suntech Power.  Eskom naturally has a huge role to play to.

 

Growthpoint‘s Lincoln on lake on Umhlanga Ridge provided the location whilst Suntech and Hudu provided the solar panels and the installation. Eskom shared in the costs. The project is the largest photovoltaic installation to an office building in the province and represents a potential saving of 44kWs, which equates to some 87,000kWhs per annum.

 

The carbon saving is estimated at being around 89 610kg CO2 annually or 240 trees saved a year. “The latest innovations in the solar energy sector provide increased applications and effectiveness, as well as financial viability,” I-NetBridge quoted  Martin Viljoen, Managing Director of Hudu. “We are excited to be part of this resourceful project and to be a participant in the solar energy revolution that that is taking hold in SA.”

 

The pilot project has serious potential for application in buildings across South Africa. Durban has another reason to say “look at me.”

 

Durban’s more than just a pretty face

Looking past Durban’s ‘pretty face’ of the Moses Mabhida Stadium, uShaka, the new beachfront and golden mile, the proximity to world class game reserves and the Berg, not to mention the many attractions of the Seaside life style, one is still compelled to take Durban seriously as South Africa’s third largest, and often forgotten, commercial hub.
It seems Durban is experiencing a flurry of commercial and industrial property and infrastructure investment at micro and macro levels. But the publicity the city has received has been mixed of late.

 

It was one of those “do you want to hear the good news or the bad news” scenarios at the beginning of the year.

The Good news was that Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. The bad news was the findings of the research study conducted by development economists Urban Econ on behalf of SAPOA that Durban is the most expensive South African city to live in compared with Johannesburg and Cape Town.

 

The study was based on tariffs applicable to new residential, retail, office and industrial property developments, from zoning and subdivisional fees to building plan fees, connection charges, consumption charges and rates. It turns out eThekwini is on average 30% more expensive than other cities. The major difference in eThekwini is the existence of a ‘development surcharge’ which some are challenging as unlawful.  Some say this is causing development to flee the city boundaries. Time will tell.

 

A point in case may be Ballito, since it’s outside of the grip of eThekweni.  Ballito has recently launched a major business services park. Some say the development promises to reposition the North Coast as a serious industrial property contender.  The move brings online 9 light industrial zoned serviced platforms totalling 18.5 hectares offering multi-use options from warehousing and factories to show-rooms, offices and mini units.

 

Given the lack of similar space available between Durban and King Shaka the future looks bright for the business service park.

 

Back to eThekwini though. Bridge City, in Durban’s Kwamashu/Phoenix intersection has been trading since Oct 2009. But phases of this urban renewal project continue to be built which includes, among other things, residential apartments, a 500 bed state hospital, a regional magistrates court and government offices.

 

Last October saw the completion of Bridge City’s underground railway station situated beneath the mall. The development which is being linked to a bus and taxi hub will be an intermodal transportation facility easing road congestion and providing convenient transportation for about 613,000 residents in the surrounding areas of lnanda, KwaMashu, Ntuzuma and Phoenix.

 

A retail warehousing Business Park is the next phase of the 60ha Bridge City development and its launch will bring 12 hectares to the market. The Business Park is ideally suited to retail warehousing, construction related activities and training facilities. The Bridge City Town Centre is priced from R950/m2 for commercial/retailbulk and R300/m2 for residential bulk. The remaining permitted bulk in Bridge City Town Centre is 490 000m2 which will include approximately  4500 residential units, with the balance of 290 000m2 of bulk being for prime business space. Bridge City has been earmarked by eThekwini Municipality as “a catalyst for economic growth in KZN”.

 

But it’s not all about big developments.  Chantal Williams, leasing and sales broker for JHI Properties in KwaZulu-Natal has drawn a lot of attention having concluded in excess of 85 transactions for the lease and sale of commercial property in the region, receiving an award for achieving the highest individual sales turnover for any JHI Properties broker nationally.

 

“Standalone homes converted to commercial use and situated in good locations in Durban’s Morningside area, as well as prime office accommodation in La Lucia Office Park continue to solicit a high level of interest and enquiries,” says Williams. “The nodes which are most in demand are predominantly Morningside, Durban North and Umhlanga, with the size range mainly from 80-500sqm most sought after, and occasionally slightly larger premises.

 

In Durban’s CBD Williams recently concluded a transaction for 1036sqm of office accommodation for a call centre, LikeMinds, which has relocated to Durban Bay House – a building which has been upgraded to AAA grade.

 

Craig Ireland, director of LikeMinds, says the decision to make a home for the firm in the CBD was because all their staff use public transport. “Being in the city centre makes it very easy for staff to commute from a number of different locations, coupled with the fact that the concentration of retail in the CBD is a positive factor for our staff. A further attraction is the rejuvenation of the building, which will enable it to attract a good calibre of tenant as well as additional business,” says Ireland.

 

Finally though not exhaustively, land developer Tongaat Hulett is developing the Umhlanga Ridgeside quicker than you can shout economic slowdown. The four-phased Ridgeside development consists of 140 ha of land creating a triangle bordered by Umhlanga Rocks Drive, the M4 and M41, that links Gateway, La Lucia Ridge Office Estate, The Manors, Lower La Lucia and Umhlanga Rocks Drive. It is ideally positioned along the busy North Coast corridor, just 15 km north of the Durban CBD and harbour and only 10 km south of King Shaka International Airport.

 

The development, which offers residential, retail and leisure opportunities, and has included major improvements to the road infrastructure in the area, is expected to create 125 000 jobs over the 10 year development period. Investec, Vodacom and BDO have made Ridgeside their KZN home, and in the development sector, Zenprop, JT Ross Construction, Maponya, ERIS and a consortium headed up by FWJK Quantity Surveyors are making their presence felt.

 

There’s much commercial and infrastructural activity in the city of surf and turf. It’s a healthy mixture of private sector, local and national government input. How the city is run is going to require hard-core engagement from locals and business to see to it that the cream isn’t skimmed off the top for the fat cats that can smell investment from a long distance.