Unlike its namesake species in the wild, Buffalo City has yet to take its place among the biggest and most powerful competitors in the land. However, a spate of recently initiated property developments and high-profile investments have begun to change the city’s image from a sleepy backwater to a force to be reckoned with.
The Border Kei region’s properties — commercial, office, retail, industrial and residential — have performed well against national averages, recording some of the highest rental returns in the sector in the past year.
Commercial property has responded more slowly to South Africa’s exponential property growth of recent years, but substantial investments have been made in the retail sector. New shopping malls have opened in King William’s Town, Alice, Mthatha and Gonubie.
The office sector has experienced similar strong rental growth which has resulted in more developers redeveloping residential homes in several parts of East London. This trend is likely to continue as CBD office rentals remain competitive and premium office space rentals in new developments grow.
Development of the local coastline, in line with the city’s Integrated Development Plan, is long overdue.
Ted Keenan, spokesman for BEE property developer Billion Group, said the number of cranes in the skyline spoke of the city’s changing fortunes. “Current developments under way will make residents proud of and improve Buffalo City as a place to live. These developments are adding vibrancy to the CBD and creating jobs — nearly 12 000 direct and indirect due to Billion’s activities alone.”
Billion Group opened the R500 million Mdantsane Mall in April this year, and is well into construction of the R2.3-billion Hemingways regional mega-mall, a 78135m² development set for completion in October 2009.
Executive chairman of developers Billion Group Sisa Ngebulana said Mdantsane has become a new premier shopping destination for city residents. “Mdantsane City Mall services the aspirational and practical shopping needs of the burgeoning middle class in previously under-serviced areas around Buffalo City.”
By far the largest mall in the Eastern Cape on completion, Ngebulana said Hemingways would be a natural extension of the East London CBD. “It is well placed on the highway, able to serve both the city and surrounding towns and it has the hard-earned support of the country’s major tenants.”
Grant Wheatley, strategic development manager at property developer Novate, said the ambitious Triple Point mixed-use development, similar to Johannesburg’s Melrose Arch concept, would see the suburbs of Beacon Bay and Gonubie merging.
“This plan has been promoted by the city and supported with the new four-lane link road construction which has begun and will be a catalyst for development in the area. Triple Point’s infrastructure construction is nearing completion with construction already commenced by Group 5 on the apartments and construction due to commence on the four-star Protea Hotel in January 2009.”
According to Wheatley, Novate Property Investments will be releasing premium office accommodation shortly, along with a lifestyle retail component to serve this affluent “new” suburb.
“This development will provide a huge sustainable economic impact with employment being created at all levels from security personnel to hotel managers and construction employees,” he said.
On further developments for the region, Wheatley said Triple Point had now doubled in size with the acquisition of a further 10ha. “We should be active here for at least the next eight years. We are also developing a new boutique hotel on the banks of the Kowie River in Port Alfred which is set to open its doors on March 1 2009.”
Wheatley felt the local municipality faced enormous challenges in serving a vast area with huge income distortions. “They are trying to balance the needs of basic amenities in some areas such as running water to complex infrastructural challenges which require huge resources both financially and human.”
Environmental concerns have become a greater priority for property developers. “Especially on the energy-conservation side,” said Wheatley. “Our new hotel in Port Alfred will be cooled and heated using geothermal power, which should lead to energy reduction of up to 60% on this building.” — Brendan Peacock
Source: Business Times
Publisher: I-Net Bridge
Source: I-Net Bridge
