CHAPTER 1
Perched on the balcony railing of my eleventh floor apartment on the Umhlanga beachfront a red winged starling noisily announced the start of another day in paradise. He soon found his mate and with shrills of delight he and his pretty partner flew off to do the things birds do on sunny sub-tropical mornings. A pair of Egyptian Geese shrieked their delight at the slowly rising sun as a cacophony of lesser calls erupted from the wild fig trees on the dunes.
The long finger of the distant bluff reached into the Indian Ocean identifying the entrance to the Durban deep water harbour. Ghostly outlines of ships, lights winking, queued for early morning tugs to guide their passage. Sky scrapers rose from the mist on the esplanade only to disappear into low hanging cloud. The roiling surf washed into shore all along the twenty two kilometre coast line.
A pod of dolphins, grinning inanely, dipped in and out of the warm current as they languidly trolled the shoals for breakfast.
Fishermen in their stoic pursuit morphed onto the beach out of the departing darkness as the morning took on an indigo glow.
Lycra clad joggers overtook limb stretching walkers en route to the Umhlanga Promenade for their morning constitutional and surfers busied themselves waxing boards in anticipation of the dawn’s first ride. Two paddle skiers timed their launch through the incoming breakers to perfection and soon cruised effortlessly into the warm Mozambique Current.
The cappuccino trailer flipped open its counter in preparation of the morning’s first caffeine inoculations and a group of lithe ladies performed synconized exercise routines on the adjacent lawns. A group of elderly gentlemen clutched their walkers in avid early morning appraisel.
Monkeys raced across the lawns of the church grounds in a helter-skelter for the cover of the surrounding trees. A group of Indian Mynahs strutted arrogantly between the parked cars in search of left-overs. Uniformed car-guards shepherded flotillas of German Genius wagons into the demarcated bays as mothers relayed endless sms instructions to school children, husbands, lovers and friends.
Beach fanatics, already in dark glasses, clutched cooler boxes, umbrellas, towels and sun cream as the headed across the white sands to find an ideal spot for the day.
Icarus and some his followers prepared para-glider wings and strings in preparation to finding a position closer to the sun.
Turning reluctantly from the unfolding pantomime I sought the kettle and sobering jolt of Koffiehuis from the kitchen. Last night’s sixty-fifth birthday party had left me with a tight band around my forehead that only a couple of Anadin would relieve.
I showered, dragged on cargo pants and a tee shirt and then called a taxi to go into the Umhlanga Village.
As the taxi entered the Village I noted the progress on the new Protea Hotel. Still clad in metal scaffolding, the building now reached fifteen stories into the blue Umhlanga Rocks sky. Giant cement trucks masticated their contents in Chartwell Drive while an enormous gantry crane swung buckets of the stuff onto the top floor of the construction. Gloved workman reached to guide the cement loads to the right place.
Beyond that construction site contractor boards had made a perimeter around the site for the new giant shopping complex. I had once read the new Umhlanga Node Precinct Plan and knew therefor that Chartwell Drive was destined to become a carless boulevard once these buildings had been completed.
Tens of millions of Rands were being invested in the Umhlanga Village with the new tower development at Protea Hotel on Chartwell Drive that will see the hotel double its capacity from 120 rooms to 240.
Construction crews had already reached the top floor of the new 15-storey tower that should welcome its first guests in the first quarter of 2016.
According to Danny Bryer, Director of Sales, Marketing and Revenue for Protea Hotels, this is only the second major build in South Africa under the Protea Hotels banner post 2010 and represents a large vote of confidence in the KwaZulu-Natal and Umhlanga business and leisure tourism market.
“This build is an extension to Protea Hotel Umhlanga rather than a stand-alone hotel like Protea Hotel Fire & Ice! Menlyn, but at 120 rooms with restaurant and conference facilities it is certainly the size of an entirely new hotel.
“There is only one reason for capital investment of this magnitude and it’s because Umhlanga is a substantial growth node tourism-wise. The Average Daily Rate in Umhlanga has grown 7.3% year-on-year for the first six months of 2014. Revenue is growing because there is more development in the area and in the past three to four years particularly, we’re seeing much more commercial investment moving back below the ridge,” says Bryer.
“This is good news for Umhlanga as a whole, which is a vibrant micro-economy and, on the face of it, one of the province’s strongest growth nodes.”
The new Protea Hotel Umhlanga tower will contain 120 rooms that are particularly suited to corporate travellers and families. Most rooms will come standard with two queen-size beds and the bathrooms will feature baths and roomy showers.
The tower will also feature a new restaurant offering, reception and foyer, with a conference centre at the very top of the building that will boast some of the best coastal views money can buy.
The versatile conference venue will accommodate 120 delegates, but can be divided into two smaller rooms. There will also be an executive boardroom ideal for board meetings and strategy sessions.
Bryer says once the new tower is complete, plans are to gut and modernise the existing 120 hotel rooms, which will remain semi self-catering.
“Semi self-catering is a room style that suits both executive travellers and families, and the aim with the two different hotel sections and room styles is ultimately to cater to all tastes; those travellers wanting the option of being able to do a little of their own cooking, and those who want less fuss with just the sheer luxury of a hotel room.”
Investment worth billions of rand continues to pour into the luxury seaside Village of Umhlanga – earning it the sobriquet “Sandton-by-the-Sea”.
Rough estimates put investment in the Umhlanga area at about R5 billion in the past 10 years.
At least another R3bn will be pumped into in the seaside hub in the next two to three years, while a further R8bn will go into a top-end housing estate a little further north and adjacent to Sibaya Casino.
And, as the skyline changes to the north of Durban, the municipality envisages a strong economic link from Umhlanga towards Sibaya, Dube TradePort, and King Shaka International Airport to be known as the Northern Corridor.
Several upgrades in the area include completion of the mixeduse Beacon Rock development, Vivian Reddy’s multibillion rand luxury Gandhi Square project, upgrades to the Protea and Beverly Hills hotels, and a “mega-millionaires circle” in the Sibaya precinct.
“The development in the area north of Durban is an exciting subject. There are 10 new hotels, regional headquarters of big corporates and major shopping centres. The investment flows into the town centre, and the area is booming with development and investment,” said eThekwini Municipality speaker Logie Naidoo, who called the area “Sandton-by-theSea” after the affluent Gauteng hub.
The R2.5bn Gandhi Square development, backed by businessman Vivian Reddy’s Edison Group and Rob Alexander of Ducatus Property Group, is expected to break ground later this year and should be completed by the end of 2018.
Pregan Naicker, head of Edison Corporation’s property division, said the development would include high-end retail space. Checkers and Woolworths would be major anchors.
A string of luxury global brands would also be located in the centre.
There would be a 200bed four or five-star hotel and about 400 luxury apartments. Some 3 500 parking bays would be created.
“We are very excited about this project. It has been in the making for about eight years now, and we feel the market is ready for it,” said Naicker.
The seven hectare site included the present taxi rank and an old municipal building.
Naicker said that more than 10 000 construction jobs would be created, while over 3 000 direct jobs would become available once the project had been completed.
Other developments included the completion of the mixed use Beacon Rock project, which incorporates retail and residential space, upgrades to the Beverly Hills and Protea hotels, and the building of a boutique mall just behind movie mogul Anant Singh’s The Pearls of Umhlanga building.
It was announced earlier this week that exclusive pockets of land in the Sibaya precinct had just been released to cater for the growing millionaire market.
“There are said to be some 250 dollar millionaires in the area,” said Mike Deighton, the managing director of Tongaat Hulett, which owns the land.
The first parcels of land in the long-awaited Sibaya precinct, above the town of Umdloti, had now become available for development.
Of the three parcels of land, one would cater to the mega millionaires, with 28 exclusive stands on offer.
The precinct would pump R8bn into the local economy, create 7 000 permanent jobs and generate R100m in annual rates.
The Umhlanga area already generated more rates than the Durban CBD, Deighton said.
The fifth and final phase of the R3-billion Pearls of Umhlanga development was unveiled to estate agents and the media on Tuesday.
The upmarket, beachfront development is the largest private sector investment in the province in the past 10 years – and the latest phase is expected to be a sell-out.
The new phase is called The Pearls Sky, and will have 322 residential flats, with more options than the previous phases.
Residents of the 32-storey (124 metre) development will get an exclusive lifestyle… spectacular sea views, zen gardens, sun decks, private lap pools and direct access to a boutique mall offering retail, business and wellness facilities.
The development director, Anant Singh, called in global sales and marketing consultant Piaras Moriarty, who specialises in luxury developments around the world.
The Pearls Sky was unique and the pre-launch interest had been outstanding, he told guests.
He began marketing The Pearls Sky at the on-site sales centre in December and had already received a phenomenal 3 000 enquiries.
“That is no real surprise. Very few projects of this quality exist in this area,” he said, adding that it was the scarcity of such developments that was proving appealing to would-be buyers.
They had already seen 400 potential buyers and had 150 firm commitments to buy, with more than R500m already pledged. Fifty percent of the interest was local with the balance from Johannesburg.
Several celebrities had already signed up, but their names were being kept confidential, Moriarty said.
The official public launch of the investment opportunity is on April 4 at the nearby Oyster Box Hotel, and as it was by invitation only, Moriarty urged people to register as soon as possible on the website (thepearls.co.za).
VIP guest, Mike Mabuyakhulu, the MEC for Economic Development, Tourism and Environmental Affairs, said KZN continued to consistently attract fixed investments
“In the province’s view, you need to have an upmarket residential resort as it complements the tourism investments that exist,” he said.
As for the price tags, the flats range from R1.35m for an executive studio, right up to R35m for each of the two bespoke penthouses.
Pearls Sky is due to be finished in 2017.
associated with zoning legislation were holding up a number of greenfields developments, including six major commercial and industrial parks.
One of the key objectives of government in the KwaZulu-Natal province is economic growth and job creation. In order to achieve this, as much development as possible needs to take place, but many of these developments are currently being delayed for various reasons.
Deloitte called for action from both government and business leaders for closer collaboration to address administrative backlogs as well as the shortage of funding for bulk infrastructure and services. These obstacles are delaying approval for much needed developments and causing costly delays.
Understanding the development gap
In the first week of December 2014, Deloitte hosted a Bulk Infrastructure Funding Workshop for a variety of stakeholders in both the public and private sectors, providing a valuable opportunity to put key issues on the table and to identify possible solutions.
Given that Durban is one of the fastest growing cities in Africa with a population of around 4 million (which is expected to grow by 30 percent by 2020 according to STATS SA), there exists an urgent need to speed up development to create jobs and fast track economic growth.
Developers and investors need to understand the complexities of the approval process in order to better understand why, in many instances, authorities are not as excited as the developers and investors are about development proposals. Conversely, public sector stakeholders need to better understand the frustrations experienced by the private sector. Traditionally, it takes up to three years for local authorities to approve developments in KwaZulu-Natal, whereas the average approval time in countries like Dubai and Mauritius are granted in just three months. Developers warn that protracted approval periods make international investors very nervous due to what appears to be a lack of commitment from regulatory/government bodies. For their part, international funders are reluctant to finance projects until approvals are in place. Municipalities, however, will not approve the installation of bulk services until the funding is approved.
When it comes to bulk infrastructure funding, there exists a clear “chicken and egg” scenario relating to funding and market risk. The municipalities want to see the market take-up before approving a project, but private developers take a “build it and they will come” approach believing that an iconic development creates the market.
Utilities providers suggest that developers needed to look at a far wider picture, establish available capacity and clearly identify their needs in relation to this.
The many servicing the few
Dealing with a large number of different stakeholders – including, amongst others, municipal departments, Eskom, water providers and roads departments – as well as a disjointed approval structure, poses a formidable challenge for developers. In addition, national, provincial, and local government frequently have different priorities and modus operandi.
Taking this into account, developers need to try to fit in with authorities’ long-term, planning cycles whenever possible.
However, these cycles differ in both timing and duration, making it extremely difficult to synchronise them with private developers’ plans.
Developers are requesting that government departments begin to collaborate and possibly even set up a “one-stop approval shop”.
Grappling with capacity constraints
Both available capacity and the ability to fund the infrastructure needed to augment these, are major development stumbling blocks.
Developments are frequently held up because local government cannot provide the bulk services needed. This is despite the fact that the responsibility to provide services to site rests with the municipality, while the developer accepts responsibility for the distribution of services on-site.
Up until now, bulk infrastructure was funded from Municipal Infrastructure Grants. However, the need to provide basic services to unserviced areas takes precedence, leaving little budget for commercial development.
It is therefore important for both the public and private sector to look at ways to unlock funds to facilitate the delivery of bulk services and to proactively investigate alternative funding mechanisms.
One approach hinges on existing business attraction and retention strategies used by most municipalities to attract investment through the provision of water, electricity and rates payment discounts or holidays.
This suggests that, when a development is in the city’s priority areas, the municipality accepts responsibility for providing bulk services. Outside of the city’s priority areas, rebates could be used to offset the developer paying for the necessary bulk services.
It is proposed that municipalities develop an abatement package equivalent to the interest cost plus capital repayments. The municipality would then still own the asset but the developer would borrow the funds for construction. However, this does raise considerable debate. A key to this success would be for the province to adopt a test case with a mandate body in place to drive the process.
Looking at location
Globally, municipalities have mechanisms in place to direct development in priority zones. These are usually those with services in place rather than in new areas requiring considerable investment in bulk infrastructure. The same applies locally.
It makes sense for provincial and local government to prioritise key development areas including Cornubia, the Dube TradePort and Bridge City within the KwaZulu-Natal Northern Growth Corridor. This facilitates the allocation and concentration of scarce resources, expertise and planning.
Developers need to consider approaching the municipality to identify land available for development that could be easily serviced, rather than the developer choosing land and requesting the city to service it.
Moving closer to a solution
The province has been looking at many stalled projects with a view to expediting them and dealing with blockages and backlogs.
Already some progress is being made in eThekwini Municipality, which has assigned project managers to individual developments and has also appointed a city planning commission to look at the approval process and incentive packages. The objective of this commission is to make Durban more attractive and accessible to investors.
In addition, the province has also created sectoral working groups that meet monthly to address the needs of individual industries. The participants of the workshop observed that all of this was evidence that the silo mentality from prior years was starting to change and that sharing information and integrating plans was starting to happen.
Although there was not necessarily outright consensus, the Bulk Infrastructure Funding Workshop definitely provided a clearer perspective on how the city viewed infrastructure development. A follow up workshop has been scheduled for the new year.
A group of locals was huddled around early morning bloody marys under the outdoor canopies at Larry’s Linguini in Ambush Alley.
Jack and Micha had recently opened a tourism service in the Village called ‘Safaris for Africa’, which promised getaways with an authentic experience, and were thus upbeat about economic prospects in the tourism industry. Foreign visitors were regularly popping into their offices, conveniently situated next to the library in the Lighthouse Mall, to arrange day trips to the many game, historical and cultural attractions in the Umhlanga environs.
As I sipped my first elixir of the day and listened politely to the good natured chirping going on around the table, I realized that most of these locals had their source of income denominated in Pounds, Euros and Dollars and so, as the South African economy slid through mismanagement into oblivion and the Rand exchange rate plummeted in relation to the stronger foreign currencies, these fat cats grew infinitely richer in Rands. No wonder they led such carefree and jolly lives.
The Colonel was blathering along about his recent sojourn at his recently acquired holiday home in Cypress and the delights of the Greek Islands while Cuan recounted the highlights of his Harley Davidson adventure across America. Carl found an audience in the progress he was making on his several properties on the Seychelles which ignited Doug into a narrative about spending Christmas at his second home in Mauritius. Geena then waxed lyrical about her recent Mediterranean cruise and relived with all present her invigorating time she had spent in Venice and Istanbul.
Most found the Village intolerable at this time of year. With all of the up-country visitors crowding their favourite haunts the
Barbour, Ernst & Jones, Figleaves, Boux Avenue, Panache, Marks & Spencers, Littlewoods, Long Tall Sally, JD Sports, The Body Shop, Hipanema Jewellery, Martine Wester, Fat Face, Debenhams, Monsoon, Schwarzkopf, Rosa Faia and Le Redoute to name just a few. Olivia appeared in the 2010 South African Sports Illustrated Swimsuit calendar, shot by renowned beauty photographer Gavin O’Neil. She has also appeared in British Cosmopolitan, VMagazine, Tatler, GQ, Marie Claire and Hunger Magazine, shot by fashion photographer Rankin. Olivia has also graced the covers of Womens Health UK, Shape Germany and Russia’s Vsya Evropa
And the other daughters Emma, Georgie and Rachel are not too shabby either being international show jumpers, artists and budding models.
I, on the other hand, was trapped in this delightful sandbox with puerile Rands which bought less post toasties with each passing day. I supposed that I should consider myself lucky to be living in this rich last outpost of the British Empire in the first place.
Well, whoop de dooh!