Western Cape Business 2017 edition

OVERVIEW Construction

OVERVIEW Construction and property development Construction is on the rise in the Western Cape. SECTOR INSIGHT 3 000 housing units are planned for the old Conradie Hospital site. • Two new estates have been built in George. Commercial and residential development plans totalling 654 000m² were approved in the Western Cape in 2015, a 14% rise over the previous year and a figure almost nine times greater than that for the province of Gauteng. The construction sector has grown steadily over the past several years and is expected to be the fastest-growing sector in the next five years, especially in the City of Cape Town. Infrastructure spending and residential developments are the key drivers in this trend (Western Cape Treasury). The hotel-led construction boom in the central business district of the City of Cape Town is the subject of a separate article elsewhere in this publication. A large hotel and conference centre development was opened in early 2016 at Century City. House prices in Cape Town are moving upwards faster than anywhere else in the country, both in terms of inflation (10.35% vs 5.59%, Lighthouse) and average house prices (11.89% vs 5.6%, Pam Golding). A six-bedroomed Clifton house sold for a record R90-million in November 2016. The economic development department of the City of Cape Town has done a survey of 23 of the city’s industrial areas, designed to help the decision-making process for investors and businesses wanting to expand. The report found that there were 7 229 businesses in the 23 areas and that industrial property was concentrated in two areas: Voortrekker Road and the metropolitan south-east including the airport precinct, Epping and Philippi. The CBD hosts 39% of office space in Cape Town, with Bellville/Tygerberg accounting for 25%. The fairly new development at Century City has already secured 12% of office accommodation with the established suburb of Pinelands (which houses a huge Old Mutual office) responsible for 11%. The first Western Capespecific real estate investment trust (REIT) listed on the stock exchange in November 2016. Spear Reit’s R1.5-billion portfolio comprises mostly industrial property (46%) with retail and office space each making up 22%. WESTERN CAPE BUSINESS 2017 106

OVERVIEW Growth areas Brackengate 2 is a new industrial area that has been developed east of the R300 highway. It is intended as a warehousing and distribution node, given the easy access to the N1 and N2 highways. Shoprite has a distribution centre at the site. Brackengate Business Park, the first phase of the development, has tenants such as Fruit and Veg City, Docufile, Pearson and British American Tobacco. Voortrekker Road is the subject of several interventions to encourage bulking up (businesses and residential). The Greater Tygerberg Partnership is working to provide a catalyst for new developments that will build on the area’s existing strengths: transport links, medical facilities, retail, motor dealerships and residential. Possible construction projects could arise out of the fact that about 100 000 students are in the area. The Greater Tygerberg Partnership has done a study on students’ accommodation needs and encouraged building owners to cater to this need. Two buildings have recently been purchased with the intention of turning them into student accommodation. The Voortrekker Road Corridor already has services and an established built environment but it also has some dilapidated structures and has lots of open spaces. In other words, it has lots of potential. A pilot scheme is being launched on the 22ha site of the old Conradie Hospital, which lies not far from Voortrekker Road in the suburb of Pinelands. A 3 000 housing unit development is planned there, which will align with the provincial government’s concept of Live, Work and Play. With the state (provincial or local government) putting in the bulk infrastructure, costs for developers would be significantly reduced – the quid pro quo is that the developer must then set aside a certain number of housing units (49%) to grant-funded housing. Spatial planning also underpins the thinking behind the concept of an “aerotropolis”, the idea of using a city’s airport to be a catalyst for growth across multiple sectors. The airport’s cluster of industries and storage facilities should be linked to the metropolitan south-east and two sections in Philippi: the industrial area and the horticultural area. An area that continues to grow in terms of residential property is the West Coast. With mountains to the east, it is logical that areas north of Cape Town will grow: the only constraint is access to water. Blouberg, Parklands and Sunningdale continue to attract good houses for residential property. Several schools have been built in the area. A developer has put forward a plan to build a city near Melkbosstrand. The ambitious plan is called Wescape. The MyCiti bus service with its own dedicated lane is making it easier to live in suburbs along the West Coast. MyCiti also serves the Century City development. George on the Southern Cape coast has seen some substantial new developments, including a private hospital built for MediClinic, some new malls and a number of estates being completed. The famous Fancourt facility, which incorporates residential holiday accommodation and a hotel, also has three golf courses (but one has a very exclusive membership). Kingswood is another premier golf estate in George. Pam Golding was selling a three-bedroomed townhouse at Kingswood in November 2016 for R2.35m. Newer estates have been built on the eastern edge of George, near to the recently constructed mall, the Eden Meander Lifestyle Centre. Kraaibosch estate will have four options for potential buyers, including a retirement village. The Blue Mountain Lifestyle Estate has similar options. ONLINE RESOURCES Construction Industry Development Board: www.cidb.org.za Greater Tygerberg Partnership: http://gtp.org.za/ Master Builders and Allied Trades Association, Western Cape: www.mbawc.org.za SA Estate Agency Affairs Board: www.eaab.org.za SA Institute of Architects: www.saia.org.za SA Institute of Valuers: www.saiv.org.za SA Property Owners Association: www.sapoa.org.za. 107 WESTERN CAPE BUSINESS 2017