By Greg Ardé
Durban’s property market will get a shot in the arm with the announcement that developers and the municipality have done a deal to establish the city’s biggest new neighbourhood.
Westown in Shongweni could unlock a R15-billion investment over the next decade.
The 100-hectare mixed-use urban precinct is on a chunk of prime real estate along the N3 between Pietermaritzburg and Durban.
The trigger for Westown is a R1,3-billion retail complex of 45 000m².
The development is being led by privately held property company Fundamentum, whose shareholders include Durban entrepreneurs Sean and Don Bergsma.
Their partner and Fundamentum CEO Carlos Correia compared Westown to Waterfall City in Midrand, both based on a leasehold development model.
Fundamentum bought the development rights from Tongaat Hulett for 2 000ha near Hillcrest, where property prices have exploded in the last 10 years.
Correia says Westown Square will be built in two years and the retail construction will be bolstered by a R733-million infrastructural upgrade to roads and services, of which the city will cover R600-million.
Punted as a post-Covid retail experience, Westown Square will see low-rise buildings on what are now hills of sugar cane.
It will be a “high street design” rather than a single mall under one roof.
Among the three anchor tenants is an 8 000m² Checkers Hyper store.
The anchor tenants will be surrounded by almost 100 retailers and contractor Stefanutti Stocks will start work in September, although road upgrades are already underway.
“Westown will be the new economic hub for Durban’s Outer West, generating some R15-billion in new investment over the next 10 years,” Correia said.
The development will be led by Fundamentum through the construction of its own buildings and in partnership with other developers for 2 800 residential units around the shops.
There is also approval for 170 000m² of warehouses, commercial space, and a 100-bed hospital.
Fundamentum also has rights on the balance of the surrounding 2 000ha owned by Tongaat Hulett, the Johannesburg Stock Exchange-listed sugar company.
Tongaat, beset by financial scandals, initially sold 14ha of its Shongweni land to Fundamentum but Covid challenges saw the agreement renegotiated and Fundamentum assumed development responsibilities for Westown.
Fundamentum has an existing multi-billion Rand portfolio in offices, retail and industrial property in KZN, the Free State and Gauteng.
For the Bergsmas the Westown development offers hope to a province knocked by the trifecta of Covid, riots and floods.
“Westown is one of the biggest infrastructural investments in Durban since the Soccer World Cup,” said Sean Bergsma.
“We got the new leadership of Tongaat over the line by proposing sustainable property development as opposed to just selling off the land: which is why it is a leasehold structure … It envisages a precinct development rather than a retail development.”
Tongaat Hulett, via a new property company, retains ownership of the land with Fundamentum owning the development rights with a rolling 99-year leasehold. Commercial end users will pay a percentage of their rental to the property company.
Bergsma said Covid demanded a complete revision of shopping centre models that shifted the power dynamic away from retailers towards customers.
“It allowed us to revisit what retail must be to deal with the new dynamics of how people engage with spaces. It is an environment where the consumer has a much bigger voice.”
In reformulating Westown Square, Correia and his design team tapped into the popularity of the local Shongweni Market, a weekend artisanal fair that draws thousands of visitors to an area already favoured by nature lovers and hikers.
It already boasts sports facilities and a polo club that reflects Shongweni’s strong equestrian legacy. Gold Circle’s Summerveld Training Centre in Shongweni has about 1 600 stables and a number of training tracks.
Westown will emphasise big gardens, wide walkways, and an experience supportive of the Shongweni green belt and the market vibe of “meeting and mingling, but replicated in a more structured, formal way”.
Correia says Fundamentum’s retail experience took the company to areas “where no one else will go, and that is why we have been successful”.
“A shopping experience in Umlazi, uMhlanga, Inanda, or Rosebank shouldn’t be any different. Regardless of where you are, the shop fittings must be world-class, the spaces tidy, the gardens beautiful and the toilets clean. If you treat people with dignity they will be loyal customers.
“In Umlazi our mall is next to a railway line on a piece of land that no one was interested in. We have a footfall of one million a month in a 23 000m² space.”
This week dignitaries swarmed over the Westown site at the sod-turning ceremony, enthusiastic about the economic impact of the development.
Road upgrades will see a sorely needed makeover of Kassier Road that crosses the M13 and the N3. It will involve two new bridges and transforming a badly potholed two-lane road into four lanes.
Fundamentum projects that once Phase 1 construction is complete by September 2024, about 1 500 permanent jobs will be created.
Seeff’s Gregg Wilson said: “A lot of people are excited about the new Westown development, especially because there are quite a few green elements that look top class. Greater residential, retail and office space is exciting, especially on the other side of the freeway from Hillcrest considering the traffic in Hillcrest. Westown will be phenomenal for our area.”
Lee Ellis from Tyson Properties heralded the development saying the road upgrade would be an immediate boon for the area, but long term it meant the creation of a new economic hub that will have a huge impact on logistics and job creation. “We anticipate a huge surge in the number of people looking for homes in the greater Shongweni area. Current suburbs such as Hillcrest and Assagay will benefit from the creation of Westown. It will have a big, positive impact on our economy.”
His colleague, Rob Kelly, said: “This will draw in professionals who may want to reside in the area, rather than travelling greater distances to work here.” Kelly said house prices in Hillcrest had remained steady, with average listings upwards of R2 million and great demand for townhouses.