How the water crises affects Cape Town property development

Roads, electricity, sewerage and, most notably, water have a noticeable impact on property development throughout the Cape Town region, because new sites cannot be serviced.


"While the biggest challenge facing the municipality was to provide sufficient sewerage networks, with the water crisis, and for reasons we all well understand, the shortage of water is now the main challenge. Overcoming the water crisis is absorbing an ever larger proportion of the city’s resources with the result that service delivery is falling behind in many areas," states Rowan Alexander of Alexander Swart Property.

The current situation, and the many uncertainties surrounding it, foster uncertainties and make it difficult for developers to proceed with new projects or plan future developments.

"Property developers in Cape Town are seriously short of greenfield - totally undeveloped - sites, and when they do manage to get them, they are unsure if they will be given the necessary services. Future service capacity in Cape Town can these days very seldom be guaranteed to meet any specific deadline," says Alexander.

Any developer that decides - and obtains permission - for taking over agricultural land, can find themselves facing particularly challenging conditions. They may have to accept long delays before getting planning permission and the fact that in most cases no fixed date can be given for the provision of services.

Recent changes in municipal bylaws have provided a very welcome partial solution and have encouraged developers to adopt new trends and to move towards brownfield -  those in existing built up areas - where redevelopment projects are feasible. This type of development is not only allowed, but encouraged by the Cape Metropole in designated areas, especially if they involve ‘densification’, increasing the number of people the property can accommodate.

Rowan Alexander says the swing to densification is generally to be welcomed because it almost always results in more people being able to live in an area and aesthetic improvements to the precinct. It also relieves the pressure on greenfield sites and makes decision taking by the developers a great deal easier. Developers now start with a new project with an existing service infrastructure that can usually be upgraded, and existing buildings which can be transformed and added to.

"In addition, on these projects developers face less risk, as the timeline to bring the project to completion is far shorter than on most greenfield projects. And in today’s uncertain economic climate, developers prefer not to plan three or four years ahead, rather focusing on a quick turnaround and return on their investment," says Alexander.

Alexander Swart Property are taking the initiative to devote their resources to identifying sites suitable for development and appeal to property owners in the Northern Suburbs, Tableview, Parklands, Paarl, Stellenbosch and Somerset West to consider whether their properties may have the potential for development or redevelopment. Should proper owners need advice on this subject, Alexander says they are more than willing to provide it and will enjoy doing so. "It is always surprising to me how many property owners do not realise just what excellent opportunities their sites can present to a developer," says Alexander.

Adapted via article Dawood Kader & Associates


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