We’ve all heard the old adage “Location, Location, Location” when considering the purchase of property. Whilst there is much truth to this statement, quality management of a location is increasingly becoming a determinant of property growth.
In 2007, Umhlanga Village was facing rising commercial vacancies attributed to growing urban decay and increased competition from the managed precinct on Umhlanga Ridge. This had the effect of severely impacting growth in commercial and residential property values in and around Umhlanga Village.
Fortunately for property owners, businesses and holiday-makers alike, the Umhlanga Urban Improvement Precinct (UIP herinafter) has not only managed to stem this tide but it has also firmly re-established Umhlanga as one of the most desirable holiday destinations and property investment locations in the country.
The Umhlanga Promenade UIP was founded in 2003 by Southern Sun. In 2007, in response to urban decay in the Village, Brian Wright was appointed to establish the Village UIP. Today, Brian heads up both UIP’s, which are operationally managed as one precinct that includes four adjacent managed areas spanning Umhlanga Lagoon in the North to Eastmoor Crescent in the South.
The UIP has grown considerably over the past 6 years from a staff compliment of 5 people with a budget of R800,000 to over 70 staff members today with a budget of R7,5 million. This funding is 100% private and is provided by commercial and residential property owners in the area.
As Brian enthusiastically explains, public spaces need to be well managed in order for an area to flourish. By well managed, he means creating public environments that deliver high quality experiences. He believes that quality public spaces tell a story – that people care – and that this has a profound effect on protecting and enhancing the value of investment in an area.
One example of his philosophy of creating experiences can be seen in the Christmas lights soon to be erected in Chartwell Drive and Lighthouse Road at the entrance to the Village.
Broadly speaking, the UIP has a dual focus. Firstly, to provide services on the ground in the form of cleaning, maintenance and security with a strong focus on green area development. The UIP also serves as a go-to point for service requests whilst providing credible and relevant news feeds from advisories to events. The UIP works with the municipality to ensure that public services are being performed to the required standard and then fills in the gaps where necessary.
Secondly, the UIP is focused on lobbying the municipality for improvement in municipal services and investment in infrastructure. The organisation has embraced the municipality and its stature has grown as a solutions-focused organisation that, importantly, brings resources to the table.
Clearly, our beautiful promenade and burgeoning commercial hub is no serendipitous event and we owe much to the UIP team for its dedicated efforts in realizing its goal of providing a quality managed area in which we can live, work, play and invest!
So how have properties in the UIP precinct performed against the national average over the past 5 years? This is potentially an interesting mathematical exercise and one that can be deliberated upon for hours.
I pulled Deeds Office data for all sectional title units in Lagoon Drive, which have sold twice over the past 5 years (excluding outliers). By comparing each unit to its own prior sale price we get an accurate measure of growth and avoid the distorting effects of market composition.
The average price growth over the period for these units was 8.8% per annum. By comparison, the FNB Property Barometer report quotes national growth over the same period as 5.9% per annum. Thus the growth performance of properties in Lagoon Drive exceeded the national average by 49% per annum.
I strongly believe that the UIP is a significant contributor to the performance seen in this representative sample of properties. Thanks to its input, we enjoy a beautiful promenade, clean beaches and quality restaurants, which have been attracted to the area. These factors have a positive effect on the perception of the Village and thus on its property values.
In addition, the fact that there are developments and upgrades to the precinct worth more than R5bn, either in construction or in planning, is a clear indication of the confidence in the Umhlanga Village property market.
Clearly Umhlanga Village ticks all the checkboxes from a property investment point-of-view: Location, Location… Location Management!
For the first time in three years, it is forecast that there will be a 22% increase in the supply of newly built property nationally this year. Our Umhlanga market supports this statistic – cranes and scaffolding seem ubiquitous on our skyline.
However, how much of this new supply is catering to the needs of our retired population and what is the state of our retirement market on the North Coast?
Retirement options in Umhlanga can be counted on one hand and range from the more affordable Twilanga Retirement Village in Herrwood Drive to the more expensive estates like Somerset Valley in Somerset Park.
Twilanga works on the life right rental system whereby you pay a lease premium upfront and then get a pro-rata amount back if you leave or pass on within 10 years.
The village offers various independent living options ranging from R295,000 for a 40m2 bedsitter with a bathroom to R1,2 million for a 130m2 two bed, two bathroom apartment. The monthly levies are about R1,000 and R2,000 respectively.
Frail care at Twilanga ranges in price from R11,500 to R17,500 per month depending on the level of support required. This adds great value as it allows residents to “age in place” – a term coined for getting the support you need in your own living environment. This is especially convenient for married couples where a spouse needs frail care support as it saves the other spouse (and fellow elderly friends) the hassle of transport and allows more quality time between them.
On the premium end of the spectrum, Somerset Valley is a sectional title development where 20% of net profit is returned to the scheme upon exit. It comprises freestanding and semi-detached units ranging from R2 million for a 100m2 one bed, one bathroom unit to R3 million for the 170m2 three bed, two and a half bathroom option. The monthly levies are about R1,300 and R2,000 respectively.
Somerset Valley also has a frail care facility ranging in price from R18,000 to R27,000 per month depending on the services required.
Twilanga estimates that it has a 25-year waiting list and Somerset Valley has a waiting list of 15 people. The other retirement estates in our area also report excess demand and it seems, not surprisingly, that the biggest demand is for quality, affordable retirement options.
Evidently, our Umhlanga developers are heeding the call. Colin Kisten, developer of Grand Floridian in Illala Ridge, The Edge, The Meridian, Grand Central and Crystal Rock, is working on The Marina – a luxury retirement development in the Gateway area. The Marina will feature communal areas such as living areas, dining rooms, decks, a cinema and a large reception area complimenting its 150 individual units and 25%, commercial component.
“The Marina will be serviced by the medical suites that are being built as part of the adjacent Madison development, which will allow for top quality care to be provided supported further by the new Gateway Private Hospital,” explained Colin.
Another prominent local developer, Vejan Pillay, has also done some investigations into the feasibility of a retirement scheme in the Gateway area.
“We believe a well-structured retirement scheme with presence of a frail-care facility or some medical assistance and a hotel or concierge-type reception would be well-received in the Gateway area. This would be in a multi-storey complex which would be wheelchair-friendly, accommodate a manned reception, lounges etc,” says Vejan.
Further North, five minutes past Ballito, Brettenwood Coastal Estate is busy rolling out its Forest Village retirement component. The village will comprise 135 freestanding units in total when complete with two bed, two bathroom and three bed, two bathroom configurations available. They range in size from 195m2 to 264m2 and they are priced between R3 million and R4,5 million. Levies range between R2,500 and R2,900. The developers are currently in planning phase for a frail care component that will also feature step-down and dementia facilities.
The developers have paid special attention to the details of the units, including: elimination of all steps and slippery surfaces, provision of seats in showers and the use of environmentally and budget-friendly solar heating. The village also has a big substation generator to ensure uninterrupted power supply for its residents.
Perhaps the most valuable, unwritten feature of Forest Village, is that it is not isolated but rather tightly integrated with the rest of the Brettenwood Coastal Estate community comprising 705 households altogether. It provides a wonderful opportunity for retirees to live in the same estate as their children and grandchildren and enjoy all of the estate’s facilities including the clubhouse, the aerobics plunge pool, sauna and gym. The village also has an avid bird-watching community.
Catering for the needs of the elderly should be a priority, but up until now, has been somewhat neglected along our coastline. It is encouraging to see that developers have recognized this need and are responding – hopefully filling the gap over the next few years.