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Oct 22, 2007:
The Richards Bay area is experiencing a strong demand for industrial land, with prices in the region of R430 to R450 per square metre.
At a recent auction, a piece of industrial land with excellent visibility and a prime location sold for R490 per square metre. There is also a 6,000sq m industrial property currently under negotiation for R2,633m.
"Richards Bay has experienced rapid expansion over the past five years and with increasing demand, available land, which is usually owned by the local municipality, has been auctioned off," says Phil Hammill, area principal for Pam Golding Properties (PGP).
"Given the sea and harbour areas, the only room for expansion is west, i.e. inland, however this also has its limits as the larger factories limit growth in that direction. This leaves a small amount of available space for industrial use.
"However, the recent approval for the Tata steel factory has seen a move into the current end of the so-called industrial area - an area which has now taken on a new lease on life as a result of the increased demand, which is mainly for vacant land and for factories in the engineering field, brick and block production and storage facilities.
"With the intended enlargement of the harbour in the near future, the demand for subsidiary businesses has improved, again affecting the demand for industrial space," he says.
In terms of available industrial accommodation, leased properties - located in Alton, the commercial/industrial sector of Richards Bay - with warehousing and factory space, ranging from smaller units situated on 4,000sqm to larger units in the vicinity of 10,000sq m, are mainly being marketed.
Average prices range from R4,2m up to R17m, depending on occupancy and length of lease. In addition, vacant land is available and is priced at approximately R2m for 4,000sq m.
In terms of the residential property market, Hammill says it's still too early to gauge the possible spin-offs from the possible expansion of the harbour.
"There is a great deal of speculation regarding the possible expansion of the harbour. However, should this take place, there will be a significant increase in demand for housing.
"Empangeni, which is 20km inland, appears to be gearing itself towards the development of economic development housing. This is still a new aspect to the town, but with the completion of a better road infrastructure currently underway between Richards Bay and Empangeni, the latter is surely about to see positive growth.
"Most of our buyers are seeking homes for permanent residence, although we do have investors looking to purchase residential units in order to lease them out. There are also contract workers who are employed for the duration of contracts and then either stay or move on.
"In recent years Richards Bay has seen new residential developments take off, such as the new Mzingazi Golf Estate, launched approximately two years ago. The desirability for this project is high as the estate borders the Mzingazi fresh water lake.
"The development is continuing and construction has commenced. Recent trends show that sellers are more inclined to accept realistic pricing, and there is no doubt that the National Credit Act (NCA) has certainly affected the marketplace," says Hammill.
Price-wise, in the various suburbs where the demand is greater, the average selling price of homes is between R600k and R700k, while Richards Bay as a town enjoys a demand of up to approximately R1m. In the older, more established suburbs, the bulk of enquiries are from R1,1m to R1,3m.
"Numerous listings occur below R2m and a few properties range up to R4,5m - those with views over the golf course. In the established suburb of Meerensee, where demand is greatest and prices follow the demand, PGP have sold an upmarket three-bedroom simplex for R2,55m.
Birdswood, a more recent suburb with modern homes, is currently seeing an increasing popularity among home buyers. In the village of Mtunzini, just 40km south of Richards Bay, house prices start at around R1,2m, with sea views in high demand and the controlled development of the area a major plus factor as the village retains its charm and character. PGP recently sold an upmarket home here for R2,1m.
In St Lucia, about 75km further north, where the demand is mainly among Gauteng buyers - mainly as a holiday and seaside destination - PGP recently sold a home for R2,05m.
Hammill says further residential developments are in the pipeline for the Empangeni/Richards Bay areas.
Image 1:This five-bedroom home located close to the golf course in Richards Bay is marketed at R4,56m.
Image 2:This five-bedroom home in Mtunzini has sea views and is marketed at R3,5m.
Birdswood, a more recent suburb with modern homes, is currently seeing an increasing popularity among home buyers. In the village of Mtunzini, just 40km south of Richards Bay, house prices start at around R1,2m, with sea views in high demand and the controlled development of the area a major plus factor as the village retains its charm and character. PGP recently sold an upmarket home here for R2,1m. 