Facelift for Ithala’s northern KZN centres
18 October 2017 | Web Article Number: ME20177005
THOUSANDS of small, medium and micro enterprises Businesses (SMMEs) are bearing the brunt of economic uncertainty following reduced growth in household expenditure, rising unemployment, a decline in fixed investment activities and continued contraction in government consumption.
In a bid to tackle these challenges, Ithala Development Finance Corporation said its strategy was geared towards SMME and co-operative development which involves the recapitalisation and growth of its property portfolio.
The provincial development agency believes intensifying SMME growth and transforming property developments in rural and township areas are central to creating much-needed jobs to revitalize the economy.
The significant growth in township and rural retail developments is evidenced by figures from MSCI Real Estate and the South African Council of Shopping Centres (SACSC) which indicate that about 1.8 million square metres of retail space in township and rural areas has been built since 2000, from 405 000 square metres in the 1990s.
The combined space in this market now amounts to more than 2.6 million square metres.
Against this background, Ithala has commenced a refurbishment programme to revitalise township and rural economies at its retail centres in Nongoma, Ulundi and Eshowe in northern KwaZulu-Natal.
Due for completion by the end of the year, the refurbishment will collectively afford an estimated 125 local residents a living – Nongoma (52), Ulundi (31) and Eshowe (42).
A bold target has been set to increase investment in capital infrastructure in KZN from the current 16.5% of GDP to 25% by 2020. KZN forms a critical part of the National Infrastructure Plan aimed at employment intensive investments in the province.
“We approach property developments and refurbishments in consultation with all relevant stakeholders and with full consideration for the resultant impact our efforts will have on the community at large,” said Themba Mathe, Acting Group Chief Executive at Ithala.
He said for 58 years, Ithala had used its property assets to catalyse development in rural and township environments and that many other companies have since followed suit.
“Small scale businesses are catalysts for job creation. The greater the investment in small business, the greater the multiplier effect in terms of jobs created and impact in the communities in which property developments occur.”
Research reports suggest that South Africa is experiencing “unprecedented growth in urbanisation’ and is now 63% urbanised. This is expected to reach 68% by 2030, warranting up to two million square metres of additional retail floor space by 2025.
With over one million square meters of industrial and commercial space, Ithala is well placed to service a variety of business sectors across the length and breadth of KZN, thereby affirming its position as the second biggest landlord in the province.
“So serious are we about stimulating progress that our support extends as far as building shelters for informal traders around the shopping centres being refurbished, thus contributing towards their upliftment. In addition, sub-contractors who provided services within our projects are black-owned enterprises,” added Mathe.
The revamp project is aligned with government’s Provincial Growth and Economic Development Strategy to develop SMMEs and heeds the call by government to promote radical economic transformation.
Local economic sector players have welcomed the revamp of Ithala’s retail portfolio.
Thokozani Ndebele, Community Liaison Officer for Nongoma, Ulundi and Eshowe said: “The response to the shopping centre revamps from councillors, taxi associations and informal traders has been extremely positive. There is huge support for the work undertaken by Ithala Properties in these areas.”
Louwrens Fourie, a principal agent overseeing the project in the Northern region, is optimistic that the profile of Ithala would be enhanced through the revamp projects in light of the creation of job opportunities, infrastructure development and access to essential services that would be spurred in remote areas.