Opportunities for investors as Saldanha IDZ nears approval

Progress is well underway towards the declaration of Saldanha Bay as an Industrial Development Zone (IDZ) – and Pam Golding Properties (PGP) reports that the move will create not just overall economic growth in the area, but also many opportunities for investors in property. The town is located around 120km north of Cape Town, along the Cape West Coast.

The intention to declare the IDZ was gazetted in November 2012, with a public comment phase closing at the end of January this year (2013). Trade and Industry Minister Rob Davies is now busy studying the public feedback, and will consult with the rest of the Cabinet before making a final decision, expected within a matter of months. All signs point to the declaration going ahead, with Davies saying in February (2013) that a feasibility study had found Saldanha Bay to be an ideal location for the development of both an oil and gas centre and a marine repair hub.

PGP’s area manager for the West Coast, Stephanie Wynne Cole, says the town forms part of the larger Saldanha Bay municipality, which also incorporates nearby Vredenburg and Jacobsbaai. Together they are home to just under 100 000 people (Census 2011). The area’s economic character is anchored by its natural deep-water port, which has already attracted significant industrial activity such as ArcelorMittal’s steel manufacturing plant, Sea Harvest, Namakwa Sands (Exxaro) and Durfeco. There are also three military bases in the area, and a number of smaller businesses and enterprises.

“The IDZ process has identified three main sectors for further development,” says Wynne Cole, “namely renewable energy, oil and gas and maritime ship-building, and steel and minerals. It is estimated that the project will create at least 4 500 direct jobs in its first year, and up to 15 000 in subsequent years. And in fact a recent study by the UCT Graduate School of Business has indicated that these figures might even be conservative. That study also found that for every rand spent on the IDZ project, some R9.50 in return will be generated – one of the highest cost to benefit ratios the team of economists has ever encountered for such projects.”

What does this mean for property in the area? If the IDZ goes ahead, Wynne Cole says it will bring a huge influx of professionals and their teams who will be working on the new industrial and port developments, and who will all need accommodation in the area. “There is already very big rental demand in Saldanha and Vredenburg,” she says, “especially in the R2 000 to R6 000 per month price range. We are already short of stock, and with demand set to increase exponentially, it would seem to be an excellent time for investors to acquire buy-to-let properties. With the creation of so many sustainable new jobs, there will also surely be increased demand for buy-to-live properties from those who will be settling permanently in the area, or who find their economic status improved by the opportunities associated with the IDZ.”

Current pricing in the area covers a range of properties, including older homes and new developments, in a variety of price ranges. An entry-level small home can be obtained from R300 000 to R800 000, while mid-level properties are priced between R800 000 and R1.2 million. At the top end of the local market, larger and more luxurious homes can fetch from R1.2 million to R6 million, or even more for mansions located on the beachfront. There are also a number of vacant erven still available for development.

PGP has recently appointed two new agents to specialise in property in the Saldanha, Vredenburg and Jacobsbaai market. Philip Opperman and Gerrit Reinertz are based at the Langebaan office, and feel their area is poised for significant growth in its property market. “The new job opportunities created by the IDZ will significantly boost the demand for homes, both rented and owned,” they say, “and the project will also expose many new potential buyers to the superb lifestyle on offer in the Saldanha area. Besides the appeal of the beautiful bay and its beachfront, with numerous water-sports activities, there are ample local sports facilities, restaurants, churches and social clubs to enjoy. The West Coast Mall in Vredenburg has significantly boosted the presence of major retailers in the area, while major medical care is available in Vredenburg, which has both government and private hospitals. For those wanting to settle families in this idyllic environment, there are numerous schooling options, including both private and government schools.”

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