If ever there was a time for meaningful public-private partnerships in KwaZulu-Natal it would be now. This was the nub of a conversation about property and economic development in the greater Pietermaritzburg area, hosted by KZN INVEST.
A host of property experts met at the Anew Hilton Hotel in February for a discussion jointly hosted by Barnes Properties, Stowell & Company and KZN INVEST. Guests included senior Msunduzi Municipality representatives; the CEO of the Pietermaritzburg Chamber of Commerce, Melanie Veness; and keynote speaker Stefan Botha from property research company Rainmaker Marketing.
“Internationally what changes cities is a healthy collaboration between the public and private sector,” said Botha. “This helps parties keep pace with international trends and more accurately forecast development to make property ownership more achievable to more people. It unlocks value and expands the government’s income base.”
Botha said global best practice showed the overwhelming social benefit of developments that catered for a range of income groups. The future of property was not in exclusive, gated developments, but mixed developments in well managed public precincts.
Developers, often working with timelines of as much as five years, had to tailor products for a range of end-users, including Baby Boomers, GenX, Millennials and GenZ, so they had to be savvy about their projections.
Botha said global trends showed a move towards the ideal of a 15-minute city where residents walked or cycled for a quarter of an hour from their homes to work, shop, play and learn. “People are increasingly prepared to sacrifice size for shared services if convenience, cost and well managed public precincts are on offer,” Botha added.
More property role players were collaborating around how to make development offerings more accessible with tools like co-ownership models, rent to buy schemes, lower deposits, and also including bond and transfer costs into the purchase price.
“We all want to allow more people to create wealth through property. We will find harmony in what we do if we appreciate the mutual benefit.”
Msunduzi Municipality Economic Development Manager, Mthobisi Khumalo, called for a deeper focus on the benefits of nodal mixed-use developments, suggesting experiences at Cornubia and Bridge City might help planners chart the way forward.
He said authorities had to guard against charlatans acting as informal development gatekeepers. They were in effect slumlords who sold land they didn’t own to desperate people flocking to cities, leaving municipalities to provide requisite services like water, sewage or electricity afterwards.
Leading Pietermaritzburg developer Andrew Barnes said there was a strong demand for secure, well-run complexes, especially since the July 2021 riots.
David Patrick from Harcourts said his firm saw deep demand for free-standing houses in Pietermaritzburg priced R1,5-million and below.
Zia Simpson from Stowell & Company said she noticed considerable demand for houses in the R850 000 to R1,5-million market.
Paul Campbell from Natal Property Consultants said pent-up demand in Pietermaritzburg could be realised if property purchase costs (transfer and bond registration) of around R90 000 per R1-million could be met without a cash deposit.
“There are so many government employees who are prospective buyers. We need to find a product that meets that demand. It’s an untapped market.”
Chris Halford from Halo Properties said Pietermaritzburg needed space for new developments, like the ones in Hilton that were adjacent to forests.
Veness said the Pietermaritzburg Chamber was the third biggest in the country, dispelling notions that it was a sleepy hollow. “The city has enough amenities, a whole lot of heart and a concentration of some of the best schools in the country. It is an hour’s drive to the beach and the mountains.”
She said the private healthcare sector was “super buoyant”, driven by huge retirement developments, a big civil service market and the fact that Pietermaritzburg served a vast area without healthcare facilities. “There is huge potential to leverage this to our advantage. We should also be a university town considering our schools are as good as they are.” Veness said business needed a stable electricity supply.
Rupert Edwardes from Stowell & Company said there were bottlenecks in the issuing of municipal rates clearance certificates. And outside of the city, he said, farmers were consolidating properties and looking for economies of scale.
Barnes added that Pietermaritzburg had great potential but development margins were low and few buyers were able to pay more than R15 000/m². He encouraged role players to collaborate to meet market expectations, reduce red tape and consider rates holidays to encourage development.
“Our challenge is to jointly navigate processes. Meeting these challenges requires discipline and commitment.”
