Construction on KZN’s new mini city Westown to finally begin

Westown, a new mixed-use mini city west of Durban in KwaZulu-Natal, finally broken ground with a ceremonial sod-turning on Thursday, almost four years after plans for the initial development were announced by developers Fundamentum Property Group and JSE-listed sugar and property group Tongaat Hulett.

The multi-billion-rand development planned for land under sugarcane fields in Shongweni will be anchored by Westown Square – a “high street” shopping centre expected to have a price tag of R1.3 billion.

Westown Square will be surrounded by medium to high density residential areas, a school, private hospital, office spaces as well as warehousing and logistics capacity that is expected to be the halfway house for truck drivers enroute to Johannesburg.

Infrastructure development will be first on the list for developers with the first phase focusing on a road infrastructure upgrade of Kassier Road – between Alverstone Road and MR559 – to a two-by-two lane with median and sidewalks.

The road work – which is set to officially begin construction in September – will take place in tandem with the construction of the 45 000m² shopping centre.

The Fundamentum and 100% Durban local led development will be steered by Gumtree’s newest owners and entrepreneurs Sean Bergsma, Don Bergsma and seasoned property developer and Fundamentum CEO Carlos Correia.

Read: Exclusive: Durban venture capitalists buy Gumtree SA from eBay-linked Adevinta

“Fundamentum is committed to changing the tide on developments of this nature, by leading a mixed-use urban sustainability agenda at Westown – inclusive, environmentally sustainable, high-energy, safe and secure,” Correia says.

“Westown is a place – the new City of the West.  A ground-breaking, locally driven initiative that connects people with spaces and experiences, bringing new opportunities to live, work and thrive.”

“Now that the first tender for the upgrade of Kassier Road has been awarded to a stellar local development team, including contractors Stefanutti Stocks and engineering consultants SMEC South Africa, we are eager to get moving,” Correia adds.

Ownership

The development is modelled after Johannesburg’s Waterfall City in Midrand. Developers Fundamentum have obtained development rights for Westown – of about 517 000m² of bulk floor area – through a rolling 99-year leasehold agreement with Tongaat.

This deal is a positive move for debt laden Tongaat Hulett, as the listed company will retain ownership of the land and receive rental income from commercial end users – raking in more income than what the old sugarcane fields can manage.

The Durban-based company has battled some financial struggles in the last few years with the company registering two suspensions from the JSE since 2019. The latest temporary suspension – which took effect on 20 July 2022 – came at the company’s request after it failed to publish financial results to the market.

Tongaat’s recent financial woes as well as the disruption caused by the Covid-19 pandemic in 2020 played a big role in the almost four-year delay on construction for the development. A delay that according to Correia necessitated many trips back to the drawing board and negotiating table for Fundamentum.

Forming part of the agreement between the parties is that Fundamentum and the City will take joint responsibility of fitting the over R700 million infrastructure development bill for the development with the City carrying majority of this cost.

Investment potential

According to Fundamentum, the development holds new private sector investment potential of more than R15 billion over the next decade to fifteen years.

Fundamentum says it is currently in talks with the some of the country’s major grocers Woolworths, Shoprite and Spar regarding their presence in the retail space.

Talks are also underway with major fashion retailers to get them on board, a move that promises to create thousand of jobs in the area.

Current estimates are that the development will create over 15 000 jobs over time just in construction while post completion, Westown is expected to create at least 7 000 permanent jobs.