Tongaat Hulett to kick off R30bn Ntshongweni development

Construction of an 85 000m² regional shopping mall in the underserved outer western part of the eThekwini metro, 30km from the port of Durban, could begin early next year.

It will form part of Tongaat Hulett’s new R30 billion Ntshongweni development that is situated within the Durban-Free State-Johannesburg logistics and industrial corridor, a strategic integrated project (SIP) prioritised by the government in its National Infrastructure Plan.

Full development of the project is expected to take place over a period of 20 years.

Tongaat Hulett has for decades followed a strategy of releasing farmland (previously used for growing sugar cane) for urban development to unlock value. Conversion takes place as urban development encroaches on farmland, increasing the land value due to its potential for urban development.

The group replaces the released land with new sugar cane fields elsewhere and has in fact recently increased land under cane by 30%.

Tongaat Hulett’s previous successful and ongoing developments include the Umhlanga Ridge Town Centre, Cornubia, Bridge City, Riverhorse Valley, Zimbali Coastal Resort, Mount Edgecombe and Sibaya Coastal Precinct.

Tongaat typically does the precinct planning and development, and sells pockets of land with design and environmental guidelines to individual developers. Tongaat establishes a management association, which ensures adherence to the guidelines even after the company itself has exited.

The group also works closely with government at all levels and, where necessary, enters into public-private partnerships for the development of affordable housing.

Ntshongweni covers a total of 2 000 hectares (ha) and is situated on the N3 and M13 routes, which means Pietermaritzburg, Durban with its port and the King Shaka International Airport are all within easy reach.

The first phase will consist of a retail and urban core, with a regional shopping centre and mixed-use residential and commercial developments, and will total 78 ha. The 85 000 m² shopping centre will be situated on 14 ha of land close to the N3 and M13 routes.

Construction of a new off-ramp from the N3 and widening of Kassier Road, the main access route, from one lane in each direction to three is expected to start around February next year, Tongaat Hulett portfolio manager Andile Mnguni told Moneyweb.

Construction of the shopping centre is expected to begin shortly thereafter. It is set to open in 2021, with developer Fundamentum expected to invest between R1.6 billion and R1.8 billion in the project, says Mnguni.

Other elements of the Ntshongweni development include a predominantly light industrial, logistics and business park precinct, and a residential component with the potential for 20 000 homes to be built. According to Mnguni, there has already been a lot of interest in the development from the logistics sector.

Residential developments could include high-end lifestyle units, retirement stock and low-cost housing built in conjunction with government. About half of the total residential units are expected to be affordable housing.

Mnguni says research has shown strong demand for residential units in the R1 million price range. The land borders that of the Ingonyama Trust and might offer the opportunity for residents to migrate to full home ownership in Ntshongweni.

Mnguni says Tongaat Hulett will develop the precinct with the aim of retaining the current rural character of the area.

Half of the development will be open area with an emphasis on cycling and other outdoor activities, incorporating adventure nodes like the Shongweni Dam and Giba Gorge.

Ntshongweni is expected to create 400 000 short-term construction jobs over the duration of development and eventually support 35 000 permanent jobs upon completion. It will generate R700 million in property rates for the eThekwini metro once completed, and the economic activity it generates at that stage will generate R5.1 billion intax revenue per annum, according to Tongaat Hulett.

Different parts of the development currently get electricity from Eskom and eThekwini. Mnguni says negotiations are underway for the Eskom-served areas to be transferred to eThekwini, and for strengthening of the grid to adequately service the development.

Read: Tongaat Hulett’s land development brings new education opportunities

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