Sweet spot

Integrated real estate development insurance

The beautiful plantations of sugar cane that are such an intrinsic part of the landscape of the KZN North Coast are transforming into new urban spaces made up of well-planned mixed-use precincts, and also into green open space and rehabilitated coastal forest.

As cities grow and expand, the surrounding areas change, too. Sometimes fast, sometimes slowly, sometimes controlled, sometimes uncontrolled – but always inevitable. This would usually involve speculative purchases by canny investors and developers who would eye out the land tracts that are either particularly well positioned, or vulnerable. And then they buy up the land piecemeal, developing it as they go along. This is the usual pattern, and it mostly works out well.But not always.

 

Durban – a waking giant

The Port of Durban is South Africa’s biggest and busiest harbour, but the city itself is often thought of as the younger sibling to Johannesburg and Cape Town – the laid-back surfer third child who’s not interested in getting a real job. Well, that’s changing. Durban is rapidly developing into a manufacturing and economic powerhouse with – yes – the country’s biggest port, and – less than 200 kilometres to the north – the huge bulk cargo-handling port of Richards Bay.

As a consequence, there is a real need for residential, industrial and commercial developments at various distances from the city, so Tongaat Hulett Developments have identified its appropriately located sugarcane land that can be more productively and sustainably used to accommodate the city’s need for growth.

Sweet spot

In the usual course of events, this would involve speculative purchase of agricultural or undeveloped land by savvy investors who would target the low-hanging fruit – distressed properties or farms – thus creating an urban sprawl, going for the type of development that would bring in the biggest profit in the shortest possible time. This type of development practice, however, fails to consider or accommodate the bigger picture, and simply ends up perpetuating the ongoing socio-economic problems from the past that put the poorest the furthest away from opportunities and urban amenities.

So it is perhaps fortuitous that much of the land north of Durban has escaped the above scenario in which many small landowners with narrow interests compete for a piece of the development pie. It may be a blessing, but it is also an immense responsibility – and it is with this in mind that the sugar agri-processing company, Tongaat Hulett, has approached the inevitable repurposing of agricultural land in a holistic and sustainable way.

‘We see ourselves as stewards of the land,’ says Rory Wilkinson, Executive Head of Planning at Tongaat Hulett Developments. ‘We continually work with the City and other stakeholders to ensure that the land is developed in accordance with Durban’s strategic objectives and Integrated Development Plan (IDP).’

 

The need

Like every other city in South Africa, Durban has not been able to provide adequate housing for its rapidly growing population. But – as we learned through years of exclusionary spatial planning – building affordable housing far from work, good schools and efficient transport networks creates its own set of problems. ‘So,’ adds Wilkinson, ‘we plan for affordable housing to be close to the light industrial and commercial areas and on good, safe, affordable integrated transport routes.’

But building spatially equitable cities is not easy. As Wilkinson says:

It involves extensive public engagement with multiple stakeholders, environmental impact assessments (EIA) and careful envisioning of projected needs in terms of land use and appropriate densities. We work very closely with the city and provincial planning departments to help implement their spatial planning objectives.

And that includes the vision for creating sought-after industrial and transport hubs centred around the two big harbours – Durban and Richards Bay – and the aerotropolis around King Shaka International Airport (KSIA). ‘We’re working with the City to create corridors of development to unlock the growth potential of KwaZulu Natal,’ says Wilkinson.

 

Win-win

Equitable development really is a win-win situation. By helping the City to provide housing for people who need it, Tongaat Hulett Developments is also creating a better quality of life for the people who live in their mixed-use developments, because a spatially and socio-economically inequitable city creates stresses for everyone.

He explains:

What’s interesting is that – when you stop to think and plan properly – you notice that social, political and market pressures are not delinked. There is a huge demand for homes selling at between R800,000 and R1.2 million so, if carefully managed, this can be a successful market segment.

And with a growth in population comes a concomitant need for more commercial and industrial development, so the KZN North Coast is rapidly becoming a commercial, industrial, residential and tourism hub – which is another opportunity.

It’s a long game, and Tongaat Hulett Developments faces different pressures to most. But, because of the way they plan with the City, the land they put on the market as development-ready really is. It’s ready!

Wilkinson explains: “When we sell land for development, developers are buying rights in a carefully planned precinct that itself sits within a carefully planned subregion. They’re not working with raw land in isolation. And we maintain the relationship beyond the sale. It’s a partnership to see the ultimate vision unfold, one in which development takes place in a considered manner that includes the neighbouring communities and progresses on the shared value creation model. We work closely with the developer to make sure the development does justice to the precinct, and fits in with the overarching vision for the area and the region.”

The process

Tongaat Hulett Development is not actually developing the land – they are repurposing it for optimal use, asserting a stringent list of achievables in which they test and drive the new land use.

Converting the land from agricultural to development-ready residential, industrial and/or commercial land is a long-term process that can take up to 10 years. ‘So we have to be thinking a decade or two ahead,’ Wilkinson says.

 

It’s very complex because every new precinct development, especially mixed use, will require market research, demand, trend analysis – and every development will have an effect on its surroundings

 

Traffic is one of the biggest constraints and the biggest challenge. As Wilkinson says: “It’s a moving target. Say, for example, we build an industrial or commercial development – how are people going to get there? Or a big housing estate – where are those people going to work? And how will they get there? What can we do to reduce the vehicle traffic and increase opportunities for public transport and other forms of transport, likecycling or walking to work?”

 

‘We put a lot of thought into traffic,’ he explains. ‘We have dedicated traffic engineers who build complex yet dynamic traffic models that – based on years of traffic data – can predict how a new road or a new development will impact flow. It’s very complex. It’s quite a science.’

So, recognising the interdependencies between residential, commercial, retail and industrial developments, the obvious solutions are to develop multi-use precincts in which people live closer to where they work and play, and also to provide for integrated transport networks.

 

The precincts

The emphasis on all the precincts currently planned or in development is on creating efficient workable neighbourhoods in which industry, commerce and retail mesh seamlessly with residential areas, extensive areas of rehabilitated natural vegetation, and tourism destinations – all connected by efficient, safe, user-friendly transport networks. New (traffic-efficiency-optimised) highways, the rapidly evolving GO!Durban integrated rapid transport network, two of Africa’s biggest and busiest harbours, and the state-of-the-art KSIA and associated aerotropolis are set to transform Durban’s inner-city, provincial, inter-provincial and international transport networks. And that will create seamless access to these new precincts. It really is all connected.

Sibaya Coastal Precinct is a lifestyle development with vast swathes of green natural space, kilometres of beach and oceanfront, and numerous vibrant residential, retirement and retail developments in various stages of completion. It’s a place for living, playing, working and relaxing. Its proximity to KSIA makes it ideal for weekly commutes to Gauteng.

Bridge City, created in a joint venture between the City and Tongaat Hulett, is a brand-new urban centre conveniently situated adjacent to the M25. Offering efficiently interconnected residential, industrial and commercial development, all served by newly built and conveniently positioned public buildings, Bridge City is focused on the GO!Durban transport hub.

Cornubia is set to become a model for integrated, socio-economically equitable urban development. This bold development is based on careful identification of the most economically and socially sustainable use for the various parcels of land that make up the precinct. With extensive industrial and commercial development combined with residential areas covering a wide range of price points, Cornubia is planned as the ultimate live and-work mixed-use precinct.

“every new precinct development, especially mixed use, will require market research, demand, trend analysis – and every development will have an effect on its surroundings”

Tongaat Hulett Development in numbers

  • 30 years of experience in land conversion
  • 1 million square metres of commercial facilities developed
  • 4,000 hectares of land converted, developed, occupied and operating
  • 42,000 staff members in six SADC countries
  • 1.5 billion rand spent in infrastructure in the last three years

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