Roxzanne van Eyk
PRIOR to 2003, the city of Pietermaritzburg had appeared to be a sleepy city of sorts, and like many other smaller South African cities, had not really grown much over previous years.
The general decay of the CBD, business closure and other tell tale signs of little growth were all reasons for the city’s previous demise. However, Pietermaritzburg has since experienced excellent development and growth in recent years, most noticeable from the period 2003-04.
The city’s economy as a whole has since this period, gone from strength to strength. In the second quarter of last year, Clive Coetzee, a UKZN economist, reported that "Pietermaritzburg is becoming an economic powerhouse. Turnover in the city’s economy has doubled, insolvencies have halved, and unemployment is declining
— a remarkable performance indeed."Other UKZN economists, Mike Hickson and George Oldham, have analysed the city’s economy in real terms for the decade 1995 to 2005. What is interesting is that turnover in the city’s manufacturing sector has increased by 50% and that employment in the same sector grew by 12% each year.
Clearly the city’s retail and residential boom is underpinned by an increasingly globally competitive manufacturing sector. A total of 7000 new jobs have been created between 2001 and 2005 from 40 new investments and a similar number of expansions.
The boom in Pietermaritzburg’s economy also shows no signs of slowing down, and is headed for an unprecedented growth in the period 2006-07, with various new developments planned for the current and future years. Notable foreign investment has been attracted from Italy and India in particular.
All this translates into the increased need for residential and commercial property.
Residential house prices have increased over the past two years, and prices have generally aligned themselves with other cities across the country. Some investors believe that the pending launch of Oldfield Business Park in the heart of the industrial suburb of Mkondeni, will not only offer investors an ideal investment opportunity, but will also alleviate the demand for light industrial space in the city.
"Not too long ago there were only a few properties priced at more than R1m, however this has changed substantially. Residential properties below R850000 are in high demand and are selling well, and now prices in the upper R1m and R2m are not uncommon," says Rob Darroll of Spearhead Marketing, the supporting marketers of the Oldfield Business Park project.
This overall demand is also expected to be fuelled by the recent changes in transfer duty legislation.
Commercial and industrial property is in short supply and as a result there is a high demand for available space. The active economy has created a demand for residential property for entrepreneurs, managers and their staff to reside. The change in the capital city status and location of provincial government has also created its own demand.
"Oldfield Business Park will consist of 114 sectionalised light industrial units with manufacturing, production agency and retail opportunities. Each unit will be approximately 150m² in size and priced from R450000," says Garth Ware of Profile Property Solutions, the sole commercial selling agents.
"The location factor for the development is emphasised by its easy access to and from the N3, being proximate to airports and the port of Durban. Occupation is expected around December 2006," says Darroll.
Pietermaritzburg has reportedly seen economic growth in excess of 30% over 2004-05 and is one of nine cities which contribute to 70% of SA’s gross domestic product.
Statistics and certain economic data extracted from article published by Rob Haswell, Strategic Executive Manager of Economic Development and Growth, Msunduzi Municipality, KwaZulu-Natal
Publisher: Business Day
Source: Business Day
