Property investors will be the big winners as the Eastern Cape Development Corporation (ECDC) picks up speed with its R546m refurbishment programme on a large portion of its R1.37bn property portfolio.
The long-term goal is getting this huge parcel of properties ready for public-private investment.
The rental investment property portfolio consists of 1,742 units spread across the Eastern Cape.
The portfolio cuts across commercial, industrial and residential property units as well as various parcels of vacant land in Mthatha, Butterworth, Komani and Buffalo City.
The work has already started on several of the 1,742 units, of which 460 are flat units from 66 blocks of flats, 526 industrial, 180 commercial, 132 retail, six leisure, and 160 stand-alone houses.
“The leisure portfolio is likely to excite developers wanting to increase their coastal offerings, or for newcomers to grab a piece of the action,” ECDC chief executive Ayanda Wakaba said.
“[It] comprises the Wavecrest Hotel, Ocean View Hotel, Kob Inn Hotel, Mazeppa Bay Hotel and Coffee Bay Hotel, for which the corporation is looking for a triple net lease tenant.
“The portfolio generally needs improvements to attract private sector investments to boost job creation, economic growth and development.”
The portfolio also includes 238 small enterprise units established largely by the former Transkei and Ciskei governments and inherited by the ECDC at their disestablishment.
“We have begun a refurbishment process which is intended to improve the state of the portfolio to transform it and improve performance.
“The Eastern Cape government committed R273m of the planned R546m, spread over several financial years,” Wakaba said.
Funding amounting to R142.5m of the total programme has been availed to the ECDC by the government and allocated towards the refurbishment of the identified properties.
The ECDC is raising the balance of R273m through a capital raise programme involving the disposal of a portion of the residential portfolio.
The ECDC has to date raised R95m from the disposal programme, with the money invested into the refurbishment.
Over the next two years, ending in the 2026/2027 financial year, the ECDC aims to raise a further R150m from the disposal of residential vacant land parcels under 2,000m² and stand-alone houses as well as identified flats, buildings and noncore commercial/industrial property.
“Projects under way involving private partners include the Mazeppa Bay Hotel, which has been awarded to an operator who is refurbishing the 90-bed hotel,” Wakaba said.
“Refurbishment work is under way on the 44-room, 80-bed Ocean View Hotel in Coffee Bay, financed by an ECDC R8m refurbishment investment.
“Work began in June, with completion planned for February 2025.
“The government is also revitalising and improving industrial park infrastructure to stimulate economic activity.
“The 156ha Dimbaza Industrial Park has been fenced through R50m funding from the department of trade, industry and competition.”
Electrical bulk infrastructure and internal roads are also being upgraded.
“The ECDC has recently awarded construction contracts worth R130m towards refurbishing four factories in Dimbaza as part of the ECDC’s programme.”
Wakaba said construction began in March 2024 and was due for completion in May 2025.
It has created a total of 200 construction jobs, and 30% of the construction value is targeted for subcontracting to local SMMEs.
One of the two factories under refurbishment houses the Non-Automotive Manufacturing (NAM) cluster at the park.
Overhauling the park’s offering is essential, considering that the estate houses 94 factories, though only 18 are leased, four are vacant and 72 are derelict.
To date, R233m has been invested. The park employs 512 permanent staff.
Dimbaza aims to include a biofuel refinery and an animal feed investor.
The ECDC wants to transform the entire property portfolio — R53m for the refurbishment of three blocks of flats in Butterworth; Kyalami (18 units), Msintsi (8 units) and Bashee (20 units completed).
Plumbing, electrical works, window repairs and tiling are ongoing and 150 jobs are expected to be created during construction.
Work on Mthatha’s ECDC Office Park begins in February 2025.
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Construction work on the R25m Butterworth ECDC Office Park is under way, with completion expected in April 2025.
The contract includes the refurbishment of the Avalon Court property which houses commercial tenants in 22 units.
Wakaba said the R6.5m construction contract under way at the 10-unit Zwelitsha Centre in Qonce was in its final stage.
The centre houses several small traders.
Contractors have also been appointed for the refurbishment of the iconic Mdantsane Mall outside East London and Development House in Mthatha.
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