Umhlanga UIP Drives Growth in Property Value
Category News: Umhlanga
We’ve all heard the old adage “Location, Location, Location” when considering the purchase of property. Whilst there is much truth to this statement, quality management of a location is increasingly becoming a determinant of property growth.
In 2007, Umhlanga Village was facing rising commercial vacancies attributed to growing urban decay and increased competition from the managed precinct on Umhlanga Ridge. This had the effect of severely impacting growth in commercial and residential property values in and around Umhlanga Village.
Fortunately for property owners, businesses and holiday-makers alike, the Umhlanga Urban Improvement Precinct (UIP herinafter) has not only managed to stem this tide but it has also firmly re-established Umhlanga as one of the most desirable holiday destinations and property investment locations in the country.
The Umhlanga Promenade UIP was founded in 2003 by Southern Sun. In 2007, in response to urban decay in the Village, Brian Wright was appointed to establish the Village UIP. Today, Brian heads up both UIP’s, which are operationally managed as one precinct that includes four adjacent managed areas spanning Umhlanga Lagoon in the North to Eastmoor Crescent in the South.
The UIP has grown considerably over the past 6 years from a staff compliment of 5 people with a budget of R800,000 to over 70 staff members today with a budget of R7,5 million. This funding is 100% private and is provided by commercial and residential property owners in the area.
As Brian enthusiastically explains, public spaces need to be well managed in order for an area to flourish. By well managed, he means creating public environments that deliver high quality experiences. He believes that quality public spaces tell a story – that people care – and that this has a profound effect on protecting and enhancing the value of investment in an area.
One example of his philosophy of creating experiences can be seen in the Christmas lights soon to be erected in Chartwell Drive and Lighthouse Road at the entrance to the Village.
Broadly speaking, the UIP has a dual focus. Firstly, to provide services on the ground in the form of cleaning, maintenance and security with a strong focus on green area development. The UIP also serves as a go-to point for service requests whilst providing credible and relevant news feeds from advisories to events. The UIP works with the municipality to ensure that public services are being performed to the required standard and then fills in the gaps where necessary.
Secondly, the UIP is focused on lobbying the municipality for improvement in municipal services and investment in infrastructure. The organisation has embraced the municipality and its stature has grown as a solutions-focused organisation that, importantly, brings resources to the table.
Clearly, our beautiful promenade and burgeoning commercial hub is no serendipitous event and we owe much to the UIP team for its dedicated efforts in realizing its goal of providing a quality managed area in which we can live, work, play and invest!
So how have properties in the UIP precinct performed against the national average over the past 5 years? This is potentially an interesting mathematical exercise and one that can be deliberated upon for hours.
I pulled Deeds Office data for all sectional title units in Lagoon Drive, which have sold twice over the past 5 years (excluding outliers). By comparing each unit to its own prior sale price we get an accurate measure of growth and avoid the distorting effects of market composition.
The average price growth over the period for these units was 8.8% per annum. By comparison, the FNB Property Barometer report quotes national growth over the same period as 5.9% per annum. Thus the growth performance of properties in Lagoon Drive exceeded the national average by 49% per annum.
I strongly believe that the UIP is a significant contributor to the performance seen in this representative sample of properties. Thanks to its input, we enjoy a beautiful promenade, clean beaches and quality restaurants, which have been attracted to the area. These factors have a positive effect on the perception of the Village and thus on its property values.
In addition, the fact that there are developments and upgrades to the precinct worth more than R5bn, either in construction or in planning, is a clear indication of the confidence in the Umhlanga Village property market.
Clearly Umhlanga Village ticks all the checkboxes from a property investment point-of-view: Location, Location… Location Management!
Author: Gareth Bailey