16 May
Aerial image of Ballito Junction

Blossoming Ballito, was there ever a ’burb more blessed in South Africa? Probably not, which is great for the people who own property on this patch of paradise in KwaZulu-Natal. And a bummer if you don’t own there. Buying now will cost you dearly. Well, almost.

Two quick riders to this generally upbeat story: there are apartments to be had for R1-million and, while the market is flying, infrastructure can barely keep pace with the build.

Cobus Oelofse, who heads up the Ilembe Chamber of Commerce, says about 600 000 residents call his area home – an area that spans from King Shaka International Airport to Amatikulu in the north and inland as far as Kranskop.

Its biggest concentration is Ballito where there are 16 housing estates – either completed or under construction – involving upwards of 12 000 residential units. This created the gold rush in Ballito and the explosion of businesses to service them: malls, hospitals, lawyers, plumbers, the works.

“We are trying hard to maintain the growth trajectory, especially with the sugar industry in the doldrums,” Oelofse says. “We are pushing industrial growth to make our economy more diverse so employment is more permanent. The property boom has meant infrastructural challenges. We need a new substation, for example, and our business confidence index shows significant overtrading in the retail sector.”

Oelofse says the rush on retail is an indicator of the excitement around Ballito. It might be overtraded now, but in the long-term it means the pioneers who take a risk in the rush get in early and are more likely to reap rewards.

The boom has meant a variety of shopkeepers appear to be flourishing. Retail mogul Allan Hirsch says his Ballito store was “very seasonal” when it opened.

“Out of season we really struggled with just locals popping in. However, over the last few years, it has changed completely. It is difficult to tell the difference between the holiday season and off-season now. The store has done incredibly well.”

Craig Toweel owns The Wedge, opposite the entrance to Zimbali. The 4 700m² mall has 28 tenants and opened in December. “Trade has been good. We’re doing well. Our position has paid off. Restaurants in Ballito seem overtraded, but on the whole, people are attracted to convenience.”

Anthony Diepenbroek is the KZN MD of Balwin Properties, a company listed on the Johannesburg Stock Exchange that is developing one of the last free sites in Ballito. The Ballito Hills development consists of 3 000 units behind Ballito Junction, with a 59m² unit starting at R1-million. So far 418 units of varying sizes have already been sold, and R180-million is being budgeted to spend on bulk infrastructure.

Diepenbroek says: “We hit the price right. It’s the last piece of land offering development on scale on the seaside of the N2. We are selling to young professionals, many of whom commute to uMhlanga, a 20-minute drive. The capital growth prospects for Ballito property are so good because there’s limited land left. What is left is expensive.”

Balwin’s success is but one of a number of development triumphs. According to property marketing and research company, Rainmaker, annual residential sales on the KZN North Coast are upwards of R2-billion, and the population on the eastern side of the N2 around Ballito has grown from 17 000 in 2011 to 32 000 in 2018.

The largest private landowners in the area have hatched a R76-billion masterplan there.

One of them is Murray Collins from Collins Residential, who says the area is “undoubtedly one of South Africa’s fastest growing residential nodes”.

Collins says semigration to KZN, especially the North Coast, and growing tourism is fuelling investment demand. “That’s why a R76-billion masterplan through various stakeholders has been created to ensure the North Coast demand continues to ‘boom’ exponentially.”

Collins says the plan includes his R2,5-billion Zululami Luxury Coastal Estate at Sheffield Beach. Launched in December 2016 with beach access, revitalised dams and wetlands, and spanning over 140-hectares, Zululami sold 80% of phase 1 before launching phase 2. That project alone employs 5 000 people and construction is at full tilt. Already bulk infrastructure and the gatehouse are built.

The next component of this masterplan is the R10-billion development Seaton, that borders Zululami and covers 411-hectares and envisages an equine district, a lifestyle village, college node and retirement home.

The Collins component of the masterplan incorporates seven development zones over 5 089-hectares including commercial, retail, residential and lifestyle. The goal is to create over 34 000 residential units and 320 000 jobs.

To date, Seaton and Zululami, the first components of the plan, have involved infrastructural spend of R71-million.

The Ballito investment machine has created a plethora of opportunities. One is the Zimbali property fund.

Last year Kuwait’s IFA Hotels & Resorts – which broke ground in Zimbali in 1996 – partnered with a finance firm to create the fund to drive investment into its properties.

The latest component is Zimbali Lakes Resort, launched in 2017, which has since achieved over R700-million in land sales.

IFA’s Phil de Sylva says the fund is meant to help taxpayers take advantage of incentives to invest in sectors like hospitality, adding that he expects it to grow to R2-billion in a few years. De Sylva says Zimbali has contributed R10-billion to the economy of KZN.

Another interesting development is that associated with the estate Lush, within Elaleni Coastal Forest. Developer Clifton Smithers has created an Airbnb type facility for his property investors to extend the investment potential beyond bricks and mortar. His short-term letting platform allows owners to exercise greater control over who rents there, mindful of preserving their estate.

Smithers says the market demand for short-term letting in Ballito is high, and owners are looking for ways to maximise this opportunity. “We introduced a short-term rental scheme for Lush. We see two types of investors: those who let their properties on an ongoing basis, and others who invest to use it as their primary residence for most of the year and then let out during the high season.”

Rainmaker says Airbnb reported 66% of KZN hosts shared their primary residence with guests for an average 13 nights a year, fetching R20 000 in income.

Smithers said: “The demand for short-term letting opportunities is unquestionable, and this demand is ever-growing. KZN’s North Coast is a top performing area when it comes to short-term letting
for holidaymakers.”

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