Mini city now being built
CANE FIELDS: SWEET DEAL FOR TONGAAT
Sugar company will retain ownership of land and receive rental income.
Westown, a new mixed-use mini city west of Durban, finally broke ground with a ceremonial sod-turning yesterday, almost four years after plans were announced by developers Fundamentum Property Group and JSE-listed sugar and property company Tongaat Hulett.
The multibillion-rand development planned for land under sugar cane fields in Shongweni will be anchored by Westown Square – a “high street” shopping centre expected to have a price tag of R1.3 billion.
Westown Square will be surrounded by medium to high-density residential developments, a school, private hospital, office buildings as well as warehousing and logistics capacity which is expected to be the halfway house for truck drivers enroute to Johannesburg.
Shoprite Group will anchor the retail centre with a flagship Checkers Hyper new-generation store, while Woolworths will be the other key anchor.
Infrastructure roll-out
Infrastructure development for the mega project will be first on the list for developers, with the first phase focusing on a road infrastructure upgrade of Kassier Road – between Alverstone Road and MR559 – to a two-by-two-lane with median and sidewalks.
The road work – which is set to officially begin construction next month – will take place in tandem with the construction of the 45 000m² shopping centre.
Westown is being driven by Durban-based Fundamentum, a private property group invested in KwaZulu-Natal and Gauteng which was founded by Carlos Correia, a seasoned property developer and former director of JSE-listed Vukile Property Fund.
Correia has secured backing for the development from Durban tycoons, brothers Sean and Don Bergsma – the duo behind the Ignition Group and Impresa Capital, which recently bought out Gumtree’s Southern Africa business from eBaylinked Adevinta. The Bergsma brothers are now shareholders in Fundamentum, with Sean on the group’s board.
“Fundamentum is committed to changing the tide on developments of this nature, by leading a mixed-use urban sustainability agenda at Westown – inclusive, environmentally sustainable, high-energy, safe and secure,” says Correia.
“Westown is the new City of the West. A locally driven initiative that connects people with spaces, bringing new opportunities to live, work and thrive.
“Now that the first tender for the upgrade of Kassier Road has been awarded to a stellar local development team, including contractors Stefanutti Stocks and engineering consultants SMEC South Africa, we are eager to get moving.”
Ownership
The development is modelled on Johannesburg’s Waterfall City in Midrand.
Fundamentum has development rights of about 517 000m² at Shongweni through a rolling 99-year leasehold agreement with landowners Tongaat Hulett.
This deal is a positive move for debt-laden Tongaat Hulett, which will retain ownership of the land and receive rental income from commercial end users – raking in more than what the old sugar cane fields would have generated.
The group’s financial woes played a big role in the almost four-year delay on construction of what was once know as the Ntshongweni Urban Development.
This delay, according to Correia, necessitated many trips back to the drawing board and negotiating table.
Questioned about the land leasehold deal, Tongaat Hulett chief business transformation officer Dan Marokane told Moneyweb “this is the first such land lease” the group has concluded.
“[It comes] post the review of our strategy to unlock value out of our land in a manner that increases [the] ultimate value realised in comparison to outright land disposals. We have since embarked on another land lease which we will announce quite soon,” he noted.