Construction & Materials

• Eskom’s new power station will boost the sector enormously.

Limpopo has experienced good growth in recent years with a high of 4.6% in 2006, levelling off to approximately 4% in 2008. While the global economic downturn has affected the province’s construction and property sectors, national and provincial governments’ investments in major projects and infrastructure have had a cushioning effect. The expected rise in tourism numbers that will follow the 2010 FIFA World Cup South Africa™ has already led to investment in improved or new tourist facilities in every part of the province.

The construction sector accounts for just less than 2% of provincial gross domestic product (GDP). Financial services and property (16.7%) and retail and wholesale (10%) are the other relevant sectors.

The major projects that have already had an impact on the province’s economy are:

  • The R35-million upgrade to Polokwane International Airport, including the construction of a new terminal
  • The construction of the 45 000-seater Peter Mokaba Stadium for the 2010 FIFA World Cup South Africa™ at a cost of R1.1-billion
  • Eskom’s new power station at Medupi, Lephalele, which will ultimately cost about R120-billion. Some 3 000 jobs have already been created and the town’s population is set to grow three-fold to 60 000. A number of new residential developments are planned, following on various medium-scale commercial projects that have already been launched in anticipation of the power station. Industrial property demand is also set to grow as suppliers to the power station look for convenient locations
  • The construction, since 1994, of more than 300 000 houses in the province as part of national government’s housing policy

The housing strategy of Limpopo’s department of Local Government and Housing  is focused on the creation of mixed-income, high-density settlements. In the course of 2009, the Bendor Extension 100 was completed in line with this approach. This will create opportunities for contractors with the skills to deliver houses of different designs within a single development.

The Limpopo Provincial Policy Framework delineates four subcorridors along which development is being encouraged, which means that potential investors can predict where growth will take place. The principles of densification, sustainability and the sourcing of labour and materials locally will apply when proposals are weighed up.
Trans-Limpopo: this corridor is effectively the very busy N1 highway, which runs through Limpopo from Gauteng to Zimbabwe. Musina is positioning itself as a transport and logistics hub and there are opportunities in retail.
Phalaborwa: the route connecting Polokwane with the heart of the Kruger National Park, passing through the beautiful hills and tea estates around Tzaneen, presents many tourism opportunities and provides links southwards to the Maputo Corridor.
Dikolong: connects the culturally rich southern region of Sekhukhune with the centre of the province and runs through the platinum mining belt.
East-West: links Polokwane to Botswana with the principal economic activities being mining and bushveld tourism.

Growth
Bela Bela is one of the fastest-growing residential towns in South Africa. Beautiful scenery, a low crime rate, excellent amenities and a thriving business sector have attracted upmarket buyers to what has become known as the ‘Gateway to Limpopo’. With more than 100 game lodges in the area, popular hot springs (the town used to be known as Warmbaths) and its situation just 100km from Pretoria, it is easy to see why property in Bela Bela is at a premium.

The area west and north of Bela Bela towards the Waterberg and along the N1 could be called the Golf Estate Belt, so numerous have the
upscale developments become in this area. This trend is covered in more detail in the tourism sector overview, but the significance of golf
estates in the property sector is unquestionable. Economists will argue over whether saturation point has been reached, but the appetite of
developers does not seem to have abated.

Limpopo is a popular tourism destination for South Africans as well as international visitors. Tourists flock to the Kruger National Park, as well as numerous private game reserves in the province. From exclusive five-star reserves to rustic, rural hideaways tourism is a major part of the property equation in Limpopo.

In Polokwane, a long battle about zoning has finally come to an end and the development of the much anticipated Mall of the North is again
under way.

The R1.2-billion shopping mall in the capital will keep in Limpopo the estimated amount of R300-million that commuters spend in Pretoria
and Johannesburg, as well as save those commuters the expense of commuting.

The 75 000-square-metre mall is being built on a 27-hectare site at the intersection between the N1 bypass and Madjadjiskloof Road by
Resilient Property Income Fund, Flanagan & Gerard and the Moolman Group. Substantial road upgrades will be done to facilitate the expected
increase in traffic. The development will also lead to the creation of thousands of jobs during the construction phase and beyond. Estimates are that the Mall of the North will create between 1 500 and 2 000 permanent jobs and about 300 temporary ones.

At the moment, the biggest shopping mall in Limpopo is the 42 500-square-metre Tzaneng Mall in Tzaneen. Plans for Polokwane to have its own International Convention Centre (ICC) have been put on hold until economic conditions improve.

ONLINE RESOURCES
Construction Industry Development Board: www.cidb.org.za
Estate Agency Affairs Board of South Africa: www.eaab.org.za
Limpopo Department of Public Works: www.dpw.limpopo.gov.za
Mall of the North: www.mallofthenorth.co.za
SA Institute of Architects: www.saia.org.za
SA Institute of Valuers: www.saiv.org.za
SA Property Owners Association: www.sapoa.org.za

















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