Billions of rands are being poured into new developments in the once-sleepy seaside villages of Umhlanga and neighbouring Umdloti and Ballito, positioning the KwaZulu Natal (KZN) north coast as one of SA’s key growth nodes.
The opening of King Shaka International Airport at La Mercy in 2010 has been a major catalyst for new money flowing into the region, with a number of large corporates — including Investec, Vodacom, FNB, Illovo Sugar and EY — relocating their head offices to Umhlanga in recent years. Retail and residential development has followed suit.
In fact, about 277,000m² of new retail space — nearly twice the floor space of Sandton City — is likely to come on-stream on the north coast over the next two years, says Theresa Terblanche, Broll Property Group’s director for the coastal region. That includes three new malls for Umhlanga alone: Cornubia (66,000m²), Pearl Walk (12,500m²) and Oceans (33,000m²). Ballito Mall is also undergoing an 85,000m² redevelopment.
Umhlanga will soon be home to the first Radisson Blu hotel in KZN — a striking 16-storey "Dubai-style" building — and a number of new luxury apartment buildings.
Recent sectional title sales have already set a new price benchmark for the area. Chas Everitt International’s sales manager in Umhlanga, Charmaine Powell, says a 477m² penthouse apartment in the Oyster Schelles development recently sold for R24m. She notes that price tags of between R16m and R20m in other luxury developments, such as Pearls of Umhlanga and the Hawaan Forest eco-estate, are no longer unusual.
The region’s development boom is being driven in no small part by JSE-listed agri-processing business Tongaat Hulett, one of the biggest landowners in KZN.
Over the past 20 years, Tongaat Hulett has successfully planned and facilitated the conversion of 4,000ha of agricultural land on the north coast. More than R60bn has been invested by the company’s development partners to turn what was once sugar and maize fields into real-estate landmarks. The latter include Gateway Theatre of Shopping, SA’s largest mall at 166,000m², luxury golf estates Zimbali Coastal Resort and Mt Edgecombe, and Sibaya Casino & Entertainment Kingdom.
The company has recently stepped up its land conversion programme on the north coast, with 8,000ha of prime-located agricultural land identified for residential, retail, leisure and commercial development.
Releasing more agricultural land for development makes sense, says Tongaat Hulett Developments planning director Rory Wilkinson. Agricultural land is typically valued at about R500,000/ha, while well-located development land can fetch up to R30m/ha.
"The pace at which Durban is growing means that there is huge demand for well-located land for urban development. Besides, the 8,000ha is a small portion of the sugar cane land that supplies our sugar mills."
Tongaat Hulett’s eight SA sugar mills are supplied by 120,000ha of sugar cane land. Wilkinson stresses that the company’s development strategy is a measured one. "We won’t sell our land at any price and it’s key that the right product is being developed."
Three mixed-use developments on Tongaat Hulett land holdings are already in the planning phase: Ridgeside, a 140ha site on the doorstep of Gateway in Umhlanga Ridge; Tinley, a 473ha site with 2.5km of beach frontage north of Ballito; and the Sibaya Coastal Precinct.
The latter is the most ambitious development project ever facilitated by Tongaat Hulett. Sibaya comprises a 1,000ha beachfront site, which will be turned into one of the largest live, work and play precincts in SA.
Wilkinson believes that Sibaya, as well as Ridgeside and Tinley, are ideally located to include a sizeable portion of retirement homes. Tongaat Hulett last month launched the "Retire KZN" campaign, an initiative set to elevate the north coast as SA’s premier retirement destination, akin to Florida in the US.
Wilkinson says the new generation of baby boomers (those over 60) are leading far more active lifestyles and living longer, which has created a huge undersupply of quality retirement homes close to world-class health-care, retail and leisure amenities.