EAST London’s planned Triple Point mixed-use precinct is modelled on Melrose Arch and will be close in scale to the renowned Johannesburg site, but are there enough people and is the economy strong enough to make the development viable?
Novate Property Investments, the developers of Triple Point, certainly think East London can support a mixed-use development of its size over the medium to longer term as the city grows.
“We are seeing a lot of corporations wanting to set up their regional head offices in East London. They generally go to Cape Town or Durban, but now they consider cities like East London. They want to attract good staff and they have to have facilities that are comparable to the likes of Melrose Arch,” says Grant Wheatley, strategic development manager for Novate.
The “aspirational” aspects of the development will also boost the site’s prospects, say the developers.
Last week Novate announced the Triple Point development would effectively double in size after the acquisition of 13ha of adjoining land for an undisclosed amount. The size of the Beacon Bay project, the first of its kind in East London, will now increase to 25ha with the value of the project increasing from R750m to R2bn. The additional land was acquired after a “lot of interest from retailers and office developers” in the Triple Point project.
Wheatley says the development will be rolled out in phases with the initial 12ha of Triple Point being completed towards 2010. The remainder of the site should be completed by 2015.
As for support for Triple Point from the East London consumer, Wheatley says the “big thing with consumers in East London” is that they want to share in what the “people in Johannesburg are experiencing”.
“They want to be seen in a high fashion environment where they can be seen to be succeeding in life. We are trying to create a stage for them.”
He says research has shown that people in East London leave the city at the weekend to travel to Johannesburg for shopping and entertainment.
Property economist Erwin Rode, of Rode & Associates, believes a mixed-use precinct such as Triple Point “could work in East London”, but it all depends on the specifics and if it is rolled out in “digestible phases”.
Though the East London economy’s prospects are not as good as Port Elizabeth’s, this need not affect the project.
Rode says Port Elizabeth is “going quite well” in economic growth but there is a slowdown coinciding with the slowdown in the motor industry.
“But on the upside Coega will come to the rescue in sustaining economic growth .”
East London is a different kettle of fish. “The only thing the two cities have in common is that East London also houses a major car manufacturer. But the prospects of East London’s industrial development zone taking off seem poor compared with Coega.”
Publisher: Nick Wilson
Source: Business Day