Green shoots of growth visible
Michelle Swart looks at a new mixed-use development that was launched late last year in Kwazulu-natal’s Umhlanga suburb
MAJOR developers, who are traditionally recognised as being astute in reading the market, are becoming increasingly active, says Elwyn Schenk, Pam Golding Properties area principal in Umhlanga and Umdloti.
“Conventional wisdom relative to cycles in the real estate market suggests the start of a property market recovery is characterised by some or all of the following factors: low values, a decline in foreclosures, some easing in credit availability, low turnovers and a shortage of stock, and a pent-up demographic demand.
“In my view residential property, especially in the areas of the golden triangle of the Western Cape, North Durban/umhlanga and Johannesburg, display all these characteristics. In La Lucia, Umhlanga and Umdloti particularly, property prices are in most cases well below their new equivalents. Banks are finding value more readily and credit is easing, albeit at a gradual pace.”
Schenk says researchers in the US describe a number of overlapping cycles in the real estate market, with shorter cycles of three to five years and longer cycles of nine to 10 years.
In SA the market softened during 2008/9, but more recently has displayed the green shoots of renewed growth. Over the longer term changes in demographics and consumer buying power are major drivers of the property market. It is a combination of these factors that is fuelling demand for property in areas such as Umhlanga and Umdloti, especially following several years of muted developer activity and rapid growth in the Ridgeside/gateway area of Umhlanga.
In Ridgeside on Umhlanga Ridge more than 220 000m² bulk commercial property has already been transferred, with big corporations such as Investec, BDO (accountants and auditors) and Vodacom joining many others on the Ridge, which is set to capitalise on Kwazulu-natal’s growing economy and expanding trade connections that are opening up investment opportunities.
In Umhlanga Village, Pam Golding Properties has acquired the exclusive marketing mandate for the Beacon Rock development, already under construction. This mixed-use project incorporating 68 apartments has wide appeal with its proximity to Umhlanga’s main beaches, restaurants and its entertainment and sophisticated security features.
The apartments are a mix of one-, two- and three-bedroom units, with residents having access to a protected landscaped courtyard and pool area.
Several units have been reserved pre-launch and Pam Golding Properties predict a fast sell-out. The development includes a retail component at ground level and four floors of office space.
In the most desirable part of the thriving Gateway node next to Chris Saunders Park, Pam Golding Properties have the sole mandate for an ultraluxurious, 68-unit apartment building called The Elements, which will employ green technology to minimise its carbon footprint.
Schenk says: “There are one-, two- and three-bedroom apartments of varying configuration, from 50m² to 108m² in size and priced from under R1m. Launching to the market early this year, the block includes two exceptional penthouses priced at R3m and R4m. The Elements will appeal to the live, work, play culture and are ideal buy-to-let investments.”
The ground floor of the fourstorey building consists of appealing garden units and 500m² of light retail/offices.
“It is no coincidence that two highly respected developers — one part of a large Gauteng group — have chosen Umhlanga as an investment destination.
“Umdloti too is no longer living under the shadow of its supposedly more illustrious neighbour. The advent of the King Shaka International Airport and the busy Dube Tradeport has revitalised the area, leading to a strong increase in demand,” says Schenk.
Pam Golding Properties recently concluded a sale in the 30 Degrees apartment block for R9,5m, a record for Umdloti, overtaking the previous highest price of R4,6m for an apartment. On the drawing board by the Liviero Group, the same developer as 30 Degrees and set to be launched through Pam Golding Properties early this year, is an exclusive block of six luxury apartments in a quiet area of North Beach Road.
“With world markets still unsettled and the threat of a double dip in Europe, equity markets remain nervous and even the gold price seems to lack direction. There are however pockets of renewed growth in property, for many the only trusted hard asset, where oversold positions and demographic shifts have fuelled demand. These areas include the east coast of the US and London and the south-east of the UK.
“I believe that the same dynamic, coupled with additional local features, is set to drive the Umhlanga and Umdloti property markets for the next decade and beyond,” says Schenk. From R1,3m for a 58m², onebedroom apartment, From R2,3m for a 122m², twobedroom unit From R2,4m for a 128m², threebedroom unit From R7m to R10,5m for fourbedroom penthouses measuring between 240m² and 360m²
Contact:
Pam Golding Properties Elwyn Schenk 031 561 5300