Property

Investors are showing confidence in KwaZulu-Natal and its contractors are busy developing major projects.

Much of the impetus sustaining the construction industry comes from major projects originating either from the 2010 FIFA World Cup South Africa™ or from government infrastructure investment. eThekwini Municipality alone has allocated R5-billion to the football event, anticipating that spending money on infrastructure now will facilitate more money coming in from sports events, tourism and foreign direct investment in business ventures in the future.

The R2.2-billion Moses Mabhida stadium project was undertaken by a consortium comprising WBHO, Group Five and Pandev. WBHO is also a participant in a joint venture (with Concor and Edwin Silver Rock) charged with building two large dams as part of Eskom’s Ingula pumped-storage power project on the border of the Free State and KwaZulu-Natal. Major investments such as the King Shaka International Airport, Dube TradePort and uShaka Marine World have had a positive effect on the construction industry and property values in the province. With the new airport having been built at La Mercy, property values in Ballito and Umhlanga Rocks, the towns on either side, are likely to rise.

Property

The Durban property market could be the next sector to receive an injection of a major investment, this time from Transnet’s plans to expand the Port of Durban. The ambitious plans for the city’s already large port will require more land and, in the long term, Transnet may have to buy the old airport (south of the city) or land at Bayhead (an area contiguous to the current port).

Transnet recently acquired Salisbury Island as part of its plans to increase container capacity. The parastatal had to provide alternative facilities for the previous occupants of Salisbury Island, the South African Navy.

The rejuvenated Mutual Mall was launched in downtown Durban in November 2009. The R155-million project, overseen by Old Mutual Investment Group Property Investments, consolidated four properties into a single 4 200 square-metre retail and office precinct. A central food court and an extra 400 parking bays were added. Gardiner House and Mutual Building were demolished to make way for the new complex.

A landmark Durban property is set for a major transformation that will bring more than 6 000 square metres of central city office space onto the market. A significant portion of The Royal, one of the city’s most famous hotels, is being converted into office space which is expected to be ready for occupation in late 2010.

The rest of The Royal will undergo a facelift, with new conference and gym facilities among the changes that will be made. A neighbouring building is receiving a R100-million upgrade from its new tenants, who plan to occupy all 10 000 square metres.

Properties in exclusive suburbs such as Berea and Morningside continue to hold their value while properties in Glenwood can be had for R1.5-million (800-square-metre erf). A larger house in Glenwood on a 12 000-square metre erf was selling in early 2010 for between R2.5-million and R3.5-million. The beachfront and central business district (CBD) areas contain many hotels and office blocks while places north of Durban such as Mount Edgecombe, La Lucia Ridge and Umhlanga Rocks (formerly known as exclusive residential areas) have become important and lucrative nodes of office-space development. Investec Bank chose the new Ridgeside Office Park in Umhlanga as the site of its provincial headquarters, which opened in 2010.

Industry dominates in the area south of Durban.

Construction

An ambitious mixed-use development is under way at Bridge City Mall. The first phase entails the construction of a shopping centre to serve the area north-west of Durban and this is on course for completion in 2010. Later stages of this development, a joint venture between eThekweni Municipality and Tongaat Hulett Developments, include the construction of a magistrate’s court, an underground railway station, residential and business estates and a provincial hospital. A range of contractors are at work on the various aspects of the project, including Enza Construction, Grinaker-LTA Building East and Crowie Projects.

KwaZulu-Natal has a number of brick companies and four cement factories. Three of these are run by NPC Cimpor (at Simuma, Durban and Newcastle), the other by Lafarge.














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