By Deon van Zyl, Chairperson, Western Cape Property Development Forum (WCPDF)
With the State of the Nation Address (SONA) front of mind, the key question from the South African property development and construction sector is: what will the President tell us about his growth vision to get construction going, and how will he align the legislation that controls our industry with this vision?
(If only all political parties would prioritize construction-led growth and development in their campaign speeches before election … Is this too much to ask for?)
National (as well as provincial and local) government must streamline legislation so that we can get into production. For example, unawarded or delayed tenders that continue to send the construction industry into a vicious downwards spiral must be audited by the Auditor General.
We call on all leaders to Just.Do.The.Math. According to the UN’s Worldometer data, the population of South Africa, currently estimated to be over 60.4 million, is forecast to be over 73.5 million by 2050, with the bulk located in urban areas. With its population growing at double the rate of Johannesburg’s, Cape Town is also set in the very near future to overtake the City of Gold.
This is a growing population who will need to be 1) accommodated 2) employed and 3) educated and trained towards being gainfully incorporated into our economy. But, at the same time, the environment that will enable this needs to be visioned towards growth, not the status quo; not business as usual. The time for change is now, and it is the property development and construction sector that provides the stage on which such change is enabled.
The worldwide economy is looking towards – and already actively engaged – in Africa, and therefore every economic sector needs stable and managed growth in Africa. The economy needs public infrastructure provision; the economy needs the private developer to build new capacity; and the economy needs the unleashing of fixed capital investment.
With SONA and the Budget in the air, and the 2024 election date imminent, we are in political “silly season”. As an industry, we are obliged to reflect on the last 30 years of democracy. We must ask: “Where in future will capital investment go and what really needs to change to attract fixed capital investment?”
In comparison to the rest of the country, “Product Western Cape” is outperforming other provinces. The market is now pricing Product Western Cape differently to the rest of the country – REITs are pushing to increase their Western Cape footprint; banks are profiling a risk differently in the Western Cape. This is a wonderful investment story, despite ongoing frustrations being experienced by the fixed capital industry.
The Western Cape Premier is pro-investment and understands the urgency; yet not all provincial departments reflect the same urgency of this. While certain municipalities are shooting out the lights with an “open for business attitude”, yet others allow sewage to flow into rivers and actively delay bulk-infrastructure implementation projects.
Although 2024 is a provincial and national election year, the real rubber hits the road at local authority level. Parties will be measured more for their performance at these municipal levels than on their national or provincial promises.
Investors will ask whether their local government, mayor, and municipal manager, is indeed open for business, or not – before choosing to endorse specific political parties.
The WCPDF recently received an invitation from SALGA to participate in a conversation on how to establish lines of communication between local government and investors. The fact that a national organisation is reaching out to a regional body such as the WCPDF is interesting, and we should see this as a positive step in the right direction: one of moving towards open dialogue. But this is what the WCPDF has been doing since its inception in 2008 – creating dialogue between private sector and local and provincial government.
Dialogue takes time to establish, and honest dialogue requires trust. And we are proud to say that our organisation has an open door to Province and some local governments in the Western. Honest dialogue also means having the platform to openly talk about the things that are controversial, contrarian and challenging. Open dialogue is what drives our annual conference, which this year takes place on the 8th and 9th of May at the Cape Town International Conference, and it is reflected in our programme. With speakers such as GG Alcock and Prof Adrian Saville on the same stage as Premier Alan Winde and Mayors Geordin Hill-Lewis and Leon van Wyk, this year will grow the relationship of open, honest, and critical dialogue.
Returning to SONA, we now know that previously promised Smart Cities and bullet trains will remain pipe dreams. But will we hear anything new that will lead to reduced red tape and streamlined procurement? Will we hear a clear instruction to the Auditor General to audit the reasons why service delivery does not take place? Will we hear a clear warning to local government to fulfil its constitutional mandate to grow the local economy?
If the answer is: “Yes”, then let’s get going. If the answer is: “No”, then, unfortunately, it remains business as usual with an implied call to industry to get on with it despite national government.
At least we know that Product Western Cape remains a positive investment story, and mayors and city managers that are stepping up to the plate will ensure that the investment offering continues to improve.
And those mayors and city managers that don’t, will be called out in the 2026 local government elections.
The Western Cape Property Development Forum (WCPDF) will be holding its 11th annual conference on the 8th and 9th of May 2024 at the CTICC in Cape Town.
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