Investing in mixed-use developments

Investing in mixed-use developments

Private Property South Africa
Cathy Nolan looks at four mixed-use developments in South Africa, at varying stages of completion, highlighting the investment opportunities inherent to properties of this nature.

Texan developers often boast that their projects are the largest of their kind anywhere. But after looking at Waterfall Business Estate, a $3-billion mixed-use urban development underway in South Africa, they’ll probably keep quiet.

This urban concept development, the largest in South Africa, covers 140 hectares and offers a 800 000sqm mix of retail space, offices and homes. It is centred around Waterfall City, a 115 000sqm shopping precinct that is combined with offices and around 8 000 apartments. This city is set to become a prime business address for companies seeking the prominence of a prestigious development and the convenience of being part of an integrated city.

Probably the easiest way to invest in this development is via Atterbury Investment Holdings, an unlisted public company with in excess of 400 shareholders, ranging from Sanlam, Absa and Royal Bafokeng to people like you and me. Since July 2006, 347 million AIH shares have traded, totalling R2.4-billion in value. AIH holds an 80 percent stake in Waterfall.

Significantly smaller but no less exciting are three mixed use developments in KwaZulu-Natal, all initiatives of Tongaat Hulett and the eThekwini municipality.

River Horse Valley Business Estate incorporates business and industrial developments and has become a blue chip facility containing highly valued and sought after property. The eThekwini Municipality and Tongaat Hulett set out in 1994 to establish the estate – which is now well-established and thriving with all 100 properties sold and nearly 160 businesses established in the area. A real-life mixed-use property investment success story.

Taking mixed-use development to the next level, Bridge City is being created some 17 kilometres from Durban’s city centre, bridging the communities of Phoenix, Inanda, Ntuzuma and KwaMashu, and linking them into the urban system. This visionary town will serve as the social and commercial centre to an area housing more than 800 000 people, who at present have generally poor access to facilities and social services.

Bridge City is planned as a catalyst for economic growth and the empowerment of surrounding communities by improving their access to public transport and opportunities to work, travel, shop and do business within the area via a symbiotic relationship between the public and private sectors.

With Phase 1, comprising retail / residential spaces, a mall, court house, and other amenities now complete, Tongaat Hulett and eThekwini are inviting investment in the commercial and industrial areas that make up Phase 2.

Another multibillion-rand mixed use and mixed income development, Cornubia, is eThekwini’s first Cabinet Lekgotla priority project. With approximately 80ha coming onto the market this year, Cornubia will be the home of the next major industrial area in the north, a key industrial development with linkages to King Shaka International Airport.

The planning of Cornubia is based upon the principles of sustainable development, the integration of wide range of income levels, employment and economic opportunities, substantial provision for schools, clinics and other social facilities, viable non-motorised and public transportation, and the importance of extensive open spaces.

Located between Phoenix, Ottawa and Waterloo, as well as Mt Edgecombe and Umhlanga, it will integrate these communities in a manner which adds value and enhances linkages for and opportunities to all.

Another vision is to create stakeholder value through the delivery of a balanced, economic, environmental and social return that is financially viable and enhances the quality of life and value of the area. Investment opportunities abound.

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