A new partnership among Tongaat Hulett, Fundamentum Property and the eThekwini municipality aims to unlock the potential of Shongweni, in Durban’s outer-west region.
The new catalytic project, combining the efforts of the public and private sectors, to create long-term value for all stakeholders, will result in the multiphased development of Shongweni’s Urban Core, the new city of Westown.
The initial stages of the Shongweni Urban development is a mixed-use precinct of urban and green spaces, centred around the new retailing hub of Westown Square, which will ultimately incorporate residential, logistics, recreational, warehousing and leisure components.
“Tongaat Hulett will benefit from sustained value creation over time, boosting the company’s strategy of evolving from outright property sales to earning annuity income from its property portfolio,” says Tongaat Property development executive Mtura Matshini.
The transaction adopted a 99-year lease approach, which allows Tongaat Hulett to retain ownership of the land and be entitled to annuity income from the residential, commercial and mixed-use properties.
“The Shongweni Urban Development project represents an innovative partnership between local government and the private sector. In overcoming the current challenging economic environment, the partners have produced a solution which transforms a key part of the Tongaat property portfolio into an annuity-generating asset,” Matshini continues.
As the landowner, Tongaat Hulett, in partnership with Fundamentum as the Westown developer, is responsible for the Shongweni Urban Development’s overall development vision, extending to the creation of compelling and tailored real estate solutions for developers, investors, local community participants, future residents and end-users.
Fundamentum, meanwhile, will oversee and manage all aspects of the development of Westown, which is the focus of the transaction with current development rights for 517 000 bulk square metres, as it is developed over multiple phases and years.
The retail offering of Westown Square sees the first phase of 45 000 m2 of development rights taken up alongside a new 100-bed private hospital, followed by commercial/business and residential developments within Westown.