»
Aug 14, 2007:
The roll-out of extensive infrastructural development for Cape Town in the run-up to the 2010 World Cup, is good news for the city’s property market. So says Mick Joyce, regional MD of Pam Golding Properties, who believes the improvement of the city’s transport system and other facilities can only generate positive sentiment and long-term growth for commercial and residential property. Joyce adds that the employment opportunities being created by the expansion plans, are also contributing, by creating new income streams and therefore a new pool of potential buyers.
“Our buoyant economic climate has meant that available infrastructure is being used up at great pace,” says Joyce. “Whilst this is of course a positive sign, it leaves us in the position of needing new investment in infrastructure if development is to continue at new sites and in new areas. From a property perspective, the availability of infrastructure such as sanitation, power supply and road access means that developers may sometimes be delayed in implementing their vision for properties they have acquired, while infrastructure is being upgraded. This can act as a natural suppressant to the pace of expansion, and can have the positive effect of reducing the number of new units coming onto the market and thereby preventing an oversupply problem.”
Joyce says this trend has been noticed in the past in areas like Blouberg and the Central City. “Where there are large pieces of land available for development, the capacity to deliver bulk services can pose a significant issue,” he says. “We have already seen examples of this with the previous moratorium on development in Table View due to the lack of sanitation capacity. We expect to see similar constraints in the Blue Downs and Delft areas, as well as for developments in newer areas of Mitchell’s Plain.”
However, Joyce is quick to add that the issue is not one of a lack of will to address the problem. “There is only so much that can be done with the available capacity in government,” he says. “Once these basic services are laid down, developers are then free to proceed in line with market forces, developing at the pace which they feel best meets demand in the market. The Century City development is a very good example of where this has happened, with units being released in phases over a lengthy period.”
Joyce also points to the recent news of a new development in the Tygerberg area, as a good example of how the issue of infrastructural constraints can be creatively addressed by establishing public/private partnerships. Burgundy Estate, which is being developed by Visigro Investments on the edges of Durbanville, will be an entirely new suburb with its own schools, shopping precinct, medical facilities and recreational areas, as well as close to 6 000 residential units. The city is investing in significant new infrastructure to support the suburb, which is expected to attract upwards of 14 500 residents over the next five years. However the developers themselves are also sharing the responsibility by designing a layout which will help alleviate the traffic congestion for which the area is already infamous. “This is a win-win situation,” says Joyce, “and we expect that buyers here will enjoy sound appreciation in value in the years ahead. PGP’s own new office in Plattekloof looks forward to servicing clients with an interest in buying here.”
