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CITY ON THE EDGE City on the Edge was the title of a recent SAPOA breakfast presentation, presented by Adrian Peters. On the Edge of what is the question? On the Edge of greatness or on the edge of the abyss. The following risks and uncertainties have been identified. Severe hardship and conspicuous inequality. Social discontent and unrest. Economic squeeze causing unemployment, strained household and municipal finances. Difficulties in rationing the provision of housing and free basic services. Sluggish private investment and job creation. Continuing urban segregation and fragmentation. People are forced to travel further than ever, on an unreliable and obsolete transport system. Many ordinary citizens anxious about the future NEVER BEFORE HAS THE QUOTE BY RAHM EMMANUEL(2008) RUNG SO TRUE YOU NEVER WANT A SERIOUS CRISIS TO GO TO WASTE. THIS CRISIS PROVIDES THE OPPORTUNITY FOR US TO DO THINGS THAT YOU COULD NOT BEFORE.( RAHM EMANUEL,2008) In unravelling the above stated challenges opportunities for property developers are abundant. Creating a less divided more efficient City is already underway with the implementation of Go Durban Durbans integrated transport system. The Durban Chamber of Commerce hosted a recent update session on Go Durban and the opportunities that this is going to present are enormous. 2022 is not just s a number anymore but represents Durbans bid for the Common Wealth Games. Like the 2010 world cup this will create a focus point and a deadline which will fast track infrastructure projects. It will put Durban firmly on the world stage and boost tourism once again creating massive opportunities for the property industry. The recent plans for the Point Development must be welcomed and will represent one of the biggest investments in Durban once they have come to fruition. An area that was once economically dead could become the jewel of Durban. The current market finds itself in an interesting space with a lot of investor money waiting for opportunities, and a severe lack of stock. Rentals are still to low to make new development attractive to the investor and the demand in this sector is being driven by the end user. As a result there is a lot of brown fields redevelopment and areas like Umbilo, Pinetown and New Germany are experiencing increased interest. There are a number of green field developments available in the west Keystone and Ibuhbesi are selling land to the warehousing and logistics market. In the North Tongaat Hulett are steaming ahead with Cornubia, Ridgeside, New Town Center to name a few. The property investor today will need to readjust his expectations as good property is trading at 9% and even 8% cap rates. On greenfield projects a longer view may need to be taken and perhaps investors should look at the capital gain rather than focusing on the short term yield. Instead of using calculations like the capitalisation rate also known as yield or return on investment, maybe the discounted cash flow or the (IRR) internal rate of return will give a more meaningful picture and a better investment decision. There have been over 70 factors identified in making the investment decision which can be daunting for even the most seasoned investor. The expertise of a professional brokerage is essential and the advice and guidance you will receive invaluable and best of all completely free to the purchaser as commission is paid by the seller. So City on the Edge? Without doubt on the edge of greatness with 2022 looming and Go Durban in full swing. What a great place to be living in! Go Durban Go. Edwin van Niekerk Director at Maxprop SAPOA KZN Regional Chair

Author: Edwin van Niekerk

Submitted 28 Aug 15 / Views 2166