Tongaat Hulett releases prime land in uMhlanga Ridge for R12-billion

TONGAAT Hulett will release 42 of the remaining 62 hectares of Ridgeside, its iconic development on uMhlanga Ridge, to the market as a single transaction in the first quarter of 2014.

Located on the prime sea-facing slopes of uMhlanga Ridge, the site is fully zoned to accommodate 485 000 square metres of mixed use floor area comprising 83 817 square metres of commercial space (offices, retail and other commercial uses) and 3 158 residential units (including hotel and other leisure uses).

Durban has been constrained relative to other major centres in prime real estate investment during recent years and the strategy is to accelerate the pace of development in Durban in collaboration with other role players.

“The transaction will allow a single investor or consortium to assemble a real estate asset base in the most sought after location in KwaZulu-Natal that will on completion, exceed R12 billion”, said Mike Deighton the Tongaat Hulett property executive.

Since the start of land conversion on umhlanga Ridge 17 years ago, the node has attracted more than R50-billion in real estate investment, while currently 164 000 square metres of development, representing more than R3,6-billion investment value is under construction.

Tongaat Hulett CEO, Peter Staude said: “The timing is right for this mega property transaction initiative to be undertaken, to maximise investment and further increase the pace of development in the region, building on the investment platform already created.”

Fact file

* The transaction forms part of Tongaat Hulett’s mega property transaction approach, a strategy that will boost market competition, effectively contributing to greater economic growth and investment in Durban.

* The transaction includes the rights to develop 485 000 square metres of mixed use floor area comprising 83 817 square metres of commercial space (comprising offices, retail and other commercial uses) and 3 158 residential units (including hotel and other leisure uses).

* All essential bulk infrastructure is in place, including a major interchange, electrical substation and environmental and storm water management infrastructure.

* The R512-million profit realised by Tongaat Hulett from its land conversion activities in the past six months included land in Ridgeside that reached the highest price per square metre achieved by the company to date, yielding net revenue after development costs of R34 million per hectare.

* Through Tongaat Hulett’s conversion of former sugar cane lands for urban uses dating back to the late 1990s, more than R50- billion in new commercial and residential property investments have been constructed on Umhlanga Ridge.

* The area has become the location of choice for premium and A-grade office space, retail, top quality residential and hotel accommodation in Durban. It has grown to accommodate more than 45 per cent of Durban’s premium and A grade office space, with a vacancy rate in 2013 of only 3,4 per cent.

* The pace of development in this area has increased significantly during the past 12 months and developments comprising 164 000 square metres of floor area, with an estimated investment value of more than R3,6-billion are currently under construction. This includes some 80 000 square metres of offices, 20 000 square metres of retail space, a hotel, a hospital and around 800 residential units.

* eThekwini Municipality’s recently launched Go! Durban integrated rapid public transport network includes routes that adjoin the site, while accessibility to Umhlanga Ridge is being vastly improved by SANRAL’s current R900-million upgrade to the Umhlanga interchange on the N2 freeway and additional lanes being constructed between Umhlanga and King Shaka International Airport.