By Shaun Harris Senior writer This email address is being protected from spambots. You need JavaScript enabled to view it.

AGGRESSIVE advertising and marketing has thrust Simbithi Eco-Estate, the latest large residential development on the hills overlooking Ballito on the KwaZulu-Natal north coast, on to the radar screens of property speculators. The upmarket development is located amid natural coastal beauty and will doubtless prove attractive for people seeking a sea cum golfing estate-type lifestyle.

But it also looks like a chance to make some quick money for those who move in and out fast enough.

Phase one, launched in December with the backing of a number of Sharks rugby players (Shaun Sowerby, Butch James, Rudi Keil and Brent Russel) who have invested in Simbithi, provoked a frenzy as crowds bought sites and complexes off plan. Last week phases two and three were launched, including plans for a nine-hole golf course.

Initially project developer Mark Taylor, MD of property group eLan, was buying up the first sugar farm Simbithi piecemeal and building as sites were sold. “However, the development has progressed so quickly we’ve now bought all four pieces of the first farm, plus a second sugar farm, with the option on a third for phases two and three.”

Taylor confirms that there’s market talk of some speculation taking place. “A few people and syndicates that bought sites between R375 000 and R400 000 have apparently resold at R600 000 to R700 000.”

That’s not a bad return over six months, especially considering that what people are buying is nothing more than the infrastructure – a plot of sugar cane – as the homes are still being built.

Listed construction group Wilson Bayly Holmes Ovcon (WBHO) entered phase one as 20% partners with eLan but has upped its shareholding to 50% for phases two and three.

But it’s an unusual shareholding agreement. WBHO didn’t actually pay anything for its half stake in Simbithi but did sign surety with Imperial Bank, which is basically the financier of the development. And WBHO will piggyback on major construction work at Simbithi, though Taylor says the normal tendering process will remain in place.

To date, eLan has spent R170m on phase one and R200m on phase two, including the cost of the farmland. That excludes significant costs to develop infrastructure – including roads, sewerage and dams, which at this stage total more than R4bn. It also excludes what must be significant advertising costs.

But it would be interesting to be able to work out eLan’s return on capital just for the money it has spent buying the sugar farms. Taylor, not surprisingly, won’t detail now much the company has received from selling sites for phase one, about 90% of which has already been sold (and in some cases resold).

However, he adds that the number would be misleading. “People at the Durban July were asking what I was going to do with all the money I was making. It gets absorbed into budgets such as marketing and advertising and is rolled over to the next phases of development.”

But if phases two and three are as successful as the first phase at Simbithi, it should be a very nice number that pops out at the end.