ECDC rolling out R546m property refurbishment programme

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31-10-2024
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Engineering News
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Provincial agency the Eastern Cape Development Corporation (ECDC) is rolling out a R546-million refurbishment programme at its R1.37-billion rental investment property portfolio, which includes commercial, industrial and residential property units in Mthatha, Butterworth, Komani and Buffalo City.

“The refurbishment aims to improve the state of the portfolio, transform it and improve performance,” says ECDC CEO Ayanda Wakaba.

The ECDC has invested R53-million into the refurbishment of three blocks of flats totalling 46 units in Butterworth. Refurbishment started in February, with completion expected in April 2025. Bashee Court has already been completed.

Plumbing, electrical work, window repairs and tiling, among others, are being attended to make the properties attractive to tenants. A total of 150 jobs are expected to be created during construction.

Further, the refurbishment programme also includes upgrading trading facilities for small businesses.

For example, a R6.5-million construction contract is underway for the refurbishment of the ten-unit Zwelitsha Centre in King William’s Town. The centre houses several small traders.

Refurbishment on the centre started in November 2023 and completion is set for December this year. The idea is to provide the centre with a facelift and to make it attractive to tenants. A total of 25 jobs are targeted to be created during construction, Wakaba notes.

Contractors have also been appointed for the refurbishment of the Mdantsane Mall outside East London and the Development House in Mthatha.

INDUSTRIAL PARKS

Meanwhile, the ECDC is also revitalising and improving industrial park infrastructure to stimulate economic activity. The 156 ha Dimbaza Industrial Park has been fenced with R50-million funding from the Department of Trade, Industry and Competition.

The Department of Economic Development, Environmental Affairs and Tourism has invested R40-million in electrical bulk infrastructure upgrades and an additional R45-million for the resurfacing of internal roads at the Dimbaza Industrial Park.

The ECDC has recently awarded construction contracts worth R130-million towards refurbishing four factories in Dimbaza as part of the corporation’s portfolio refurbishment programme.

Construction has begun on two of the four factories identified for refurbishment in Dimbaza. Construction on the two factories began in March 2024 with completion expected at the end of May 2025.

Two hundred construction jobs are expected to be created by the two contractors, while 30% of the construction value is targeted for subcontracting to local small, medium-sized and microenterprises.

“The goal is to stimulate economic activity in Dimbaza by improving the state of the facilities while attracting investors to locate their operations at the park. One of the two factories under refurbishment houses the Non-Automotive Manufacturing (NAM) cluster at the park,” says Wakaba.

The role of the cluster is to support non-automotive manufacturers to become more competitive. The NAM cluster provides shared facilities and equipment to member businesses to support their operations. A portion of the operational costs of the NAM cluster are supported by the provincial government.

“Further, interventions to overhaul the Dimbaza Industrial Park are crucial considering that the estate houses 94 factories. Of this number only 18 are leased, four are vacant, and 72 are derelict and need to be refurbished. Thus far, R233-million has been invested into the Dimbaza Industrial Park. The park currently employs 512 permanent staff.

“The investment pipeline in Dimbaza includes a potential biofuel refinery and an animal feed investor, which is currently conducting due diligence,” explains Wakaba.

FUNDING

The Eastern Cape government has committed R273-million of the planned R546-million towards the property improvement programme, spread over several financial years, he says.

So far, the Eastern Cape government has provided R142.5-million in funding to the ECDC, which was allocated towards the refurbishment of identified properties.

Further, the ECDC is raising the balance of R273-million through a capital raise programme involving the disposal of a portion of the residential portfolio, which is targeting noncore residential properties for disposal primarily to existing tenants.

To date, it has raised R95-million from the disposal programme. These funds have been invested into the refurbishment of the commercial and industrial property stock.

Over the next two years, it intends to raise a further R150-million from the disposal of residential vacant land parcels under 2 000 m2 in size and standalone houses, as well as identified flat buildings and outlier noncore commercial or industrial units, that are no longer serving its core mandate, Wakaba adds.

Further, the ECDC is looking for private investors with commercially viable proposals to invest in some of its properties in return for long-term leases.

“Strategic public-private partnerships will be for investment in the improvement and remodelling of the properties for approved business activities and to operate the properties on the basis of long-term, triple-net leases,” he says.