Specialty-products and services group AECI plans to sell 1 680 ha of its landholding of more than 3 500 ha in Modderfontein, north-east of Johannesburg, in the next five to ten years.

This will be one of the largest tracts of undeveloped real estate to be released in recent times on the Gauteng market, which has seen demand for property skyrocket in an eco- nomic environment characterised by low interest rates and low inflation. AECI’s land and assets that will be sold in Modderfontein have become surplus to the group’s operational requirements.

AECI subsidiary Heartland Properties is tasked mainly with man-aging the group’s property portfolio and realising the value of surplus land. Heartland Properties executive chairperson Neale Axelson says that the group scaled down its Modder-fontein operations in the last five years.

"Until five years ago, we had a large ammonia- and urea-manufacturing plant at Modderfontein, which gener-ated what we call weak effluent – water with concentrations of nitrogen in it.

"The effluent could not be released into rivers. Instead, we disposed of it by spraying it on the land.

"Now, more high-tech plants gener- ate far less effluent and this is dis-posed of by alternative methods," he explains.

Further, the group’s explosives-manufacturing subsidiary, AEL, which is also based at Modderfontein, is streamlining its operations and reducing its footprint.

According to Axelson, for logist-ic and regulatory reasons, only a relatively small portion of the pro-perty that has become surplus to the group’s operational requirements at Modderfontein has been put up for sale.

"We are involved exclusively in the sale of land and do not develop any structures on the property.

"However, we do go to the point of rezoning the land and obtaining township proclamation rights.

"It requires time and careful plan-ning to achieve the best value for a specific area of land," he points out.

Some of the land earmarked for eventual sale is also undergoing rehab- ilitation. The original 4 237 ha Modderfon-tein property was acquired in 1896 for the construction of explosives-manufacturing facilities to support the development of the gold-mining industry on the Witwatersrand. In the last seven years, 635 ha of the original landholding has been sold, 138 ha of which was sold last year.

Axelson emphasises that Heartland sells land and that it is not involved in property development as such.

He says it is envisaged that the remaining property that is surplus to operational needs will be sold for mixed-use development, with parts of it designated for housing across the economic spectrum, light industrial, commercial, retail or logistical use.

Last year, the Longmeadow Busi- ness Estate at Modderfontein attracted strong demand in the industrial market and Extensions 4, 5 and 6 of the development were sold out.

In the group’s annual report for 2004, AECI CE Schalk Engelbrecht said that, since sales started five years ago, the estate has attracted local and international investors who required premises for offices, warehouses and distribution centres, showrooms and high-tech industrial applications.

Extensions 7 and 8 will be launch ed later this year.

"Also at Modderfontein, sales of land for residential use gathered pace at Greenstone Hill, while the sale of a 20-ha site for a regional shop-ping centre at Greenstone Park was concluded in 2004.

"The Greenstone node has attrac-ted considerable market demand and further portions for residential and commercial use will be released in 2005," Engelbrecht stated. Other areas included in the 1 680 ha that will be sold in the next five to ten years are Westlake Residential (140 ha), Founders View (103 ha), Founders Hill (100 ha), Lakeside and Thornhill surrounds (107 ha), Isidleke East (450 ha), Isidleke West (250 ha), and Highlands Estate North and South (250 ha).

"We try to ensure that every new release of land is demand-driven and that whatever is built on the property is of good quality, so that it attracts value to the surrounding areas.

"We believe that the robust growth in Gauteng bodes well for the strong uptake of property in Modderfontein over the period which we have in mind.

"Heartland will not ‘dump’ land on the market in excess of what there is a demand for," Axelson says.

Besides Modderfontein, Heartland also manages AECI’s property portfolios in Kwazulu-Natal and the Western Cape.