The Dube TradePort Special Economic Zone (SEZ) has introduced an innovative long-term leasehold ownership model to support emerging commercial property developers.
Speaking at the South African Institute of Black Property Practitioners conference recently held at the Durban ICC, Head of Property Investment at Dube TradePort SEZ, Andile Mnguni, highlighted the significant challenges developers face, such as unaffordable land and limited access to capital.
The leasehold model provides a solution by allowing developers to access land without the need for an upfront purchase, reducing the initial capital requirements for projects.
This model is increasingly gaining recognition as the property sector adapts to a changing economic landscape.
“The leasehold model facilitates access to land, enabling developers to launch commercially viable projects by eliminating the need to buy land upfront and reducing capital requirements.
This meets all criteria needed for commercial banks to fund notarial leasehold developments,” said Mnguni.
Notarial leasehold contracts allow investors to develop land over long periods, ensuring stable revenue streams for property owners.
Dube TradePort SEZ has collaborated with development finance institutions such as Ithala Development Finance Corporation Limited and the KZN Growth Fund to secure funding for emerging developers.
Additionally, the SEZ offers up to 15% rental discounts for Black SMMEs and has piloted revenue-based rental agreements to support cash flow in the initial stages of operations.
Over the past decade, the leasehold model has successfully created a cooperative environment for developers and tenants.
This model is expected to evolve further, providing consistent revenues for landowners and financing institutions while making land access more equitable.
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