The Eastern Cape Development Corporation (ECDC) is rolling out a R546 million refurbishment programme of its R1.37 billion property portfolio that consists of 1 742 lettable units across the province to attract private sector investment.
The rental investment portfolio cuts across residential, commercial, and industrial units as well as various parcels of vacant land in Mthatha, Butterworth, Komani, and Buffalo City.
Of the 1 742 lettable units, 460 are apartments from 66 blocks, 526 industrial, 180 commercial, 132 retail, 6 leisure and 160 standalone houses.
The leisure portfolio comprises Wavecrest Hotel, Ocean View Hotel, Kob Inn Hotel, Mazeppa Bay Hotel and Coffee Bay Hotel.
The portfolio also includes 238 small enterprise units established largely by the former Transkei and Ciskei governments and inherited by the ECDC at their disestablishment.
“We have begun a refurbishment process which is intended to improve the state of the portfolio and to transform it and improve performance. The Eastern Cape government committed R273 million of the planned R546 million programme spread over several financial years towards the property improvement programme," said ECDC CEO, Ayanda Wakaba.
Funding amounting to R142.5 million of the total programme has been availed to the ECDC by government and allocated towards the refurbishment of the identified properties.
"The ECDC is raising the balance of R273 million through a capital raise programme involving the disposal of a portion of the residential portfolio, targeting non-core residential properties, primarily to existing tenants."
The ECDC has raised R95 million from the disposal programme which has been invested into the refurbishment of its commercial and industrial property stock. Over the next two years, ending in the 2026/2027 financial year, the ECDC plans to raise a further R150 million from the disposal of residential vacant parcels under 2 000m2 and standalone houses as well as certain apartment buildings and outlier non-core commercial and industrial assets.
The corporation is also inviting private investors, with commercially viable proposals and finance, to invest in some of its assets in return for long-term leases.
“Investments are earmarked to be raised in the form of strategic private sector partnerships in which private operators invest in the improvement and remodeling of the properties for approved business activities and operate them on the basis of long-term triple-net leases,” says Wakaba.
Projects underway involving private partners include the Mazeppa Bay Hotel which has been awarded to an operator. The operator is refurbishing the 90-bed hotel. Refurbishment work on the 44 rooms, 80-bed Ocean View Hotel in Coffee Bay is also underway through an ECDC R8 million refurbishment investment to make the hotel more attractive to visitors.
Refurbishments began in June 2024 and are expected to be finalised in February 2025.
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