Construction of the R3.5 billion Clairwood Logistics and Distribution Park will begin in the first quarter of the year, creating much needed employment and business opportunities for the South Durban Basin.
KwaZulu-Natal’s MEC of Economic Development, Tourism and Environmental Affairs, Michael Mabuyakhulu, recently gave the project the go ahead after his department found that the amended Environmental Impact Report (EIR) received from the Capital Property Fund in September 2014 complied with stringent regulations and adequately addressed concerns raised during an appeal. Capital has since merged with JSE listed Fortress Income Fund, which will now develop the project.
It found that public participation process followed in the environmental impact assessment process was more than compliant with EIA regulations and it outlined stringent parameters for development in response to objections raised. As a result, appeals lodged in response to the environmental authorisation granted in May 2015 were dismissed and the original decision was upheld.
The park will be developed on the site of the former Clairwood Race Course, which was acquired by Capital in 2012 for R430 million. Fortress intends developing about 350 000 m2 of warehousing on the site, with the remainder becoming paved yards to service the facilities.
The development will also include an 8ha wetland which will be fully rehabilitated.
The recent environmental authorisation released by the KZN provincial government has reduced the area for development of the site and has spelt out how Fortress must proceed with construction and rehabilitation of the site, to create a sustainable wetland area and incorporate indigenous fauna and flora.
“The Clairwood Logistics Park will meet the growing demand for A grade logistics and distribution facilities in the south of Durban, and will improve the livelihoods of surrounding communities through job creation,” says Nico Prinsloo, Fortress Income Fund’s development manager.
The new facility is expected to create an estimated 18 900 jobs during the four year construction period and more than 4 600 permanent jobs after completion in December 2020. The development comes at a time when South Africa is facing significant job losses that will add to an already high unemployment rate as the economy slows.
The South Durban Basin, in which the Clairwood Logistics and Distribution Park falls, is a national economic hub that consists of an industrial area interspersed with a residential population. The basin is bordered by major transport linkages. Market research has indicated that national and international businesses have a desperate need for modern logistics facilities in proximity to the existing port and the proposed Durban Dig Out Port.
“The Clairwood Logistics and Distribution Park site is strategically located and is the last remaining flat land available for development in South Durban. It is just 11.2 km from the existing container terminal entrance and 3.5 km from the site set aside for the Durban Dig Out Port,” says Prinsloo.
“An efficient logistics and distribution facility close to the port is expected to minimise road traffic to congested areas to the north of the city as well as inland areas such as Hammarsdale.
“The EA noted that, due to the previous lack of flat land for development that was large enough to accommodate modern logistics facilities, a clear need existed for a development of this nature. It explained that basic supply and demand market forces in co-operation with other macro factors had created a quantifiable need for a development of this nature.”
The Clairwood Industrial Park and Logistics Centre will significantly increase the eThekwini municipal rates base in the area once fully developed while also significantly increasing Durban’s contribution to KwaZulu-Natal’s gross domestic product.
The R3.5 bn to be invested in developing the site includes R110 million that will be spent on extensive upgrades of roads and infrastructure surrounding the facility.
“This will improve traffic flow into and out of the site and will ease overall traffic flow in the area and significantly improve road safety, especially for pupils attending schools close to the site,” says Prinsloo.
To date, Fortress Income Fund has invested R3.8m in schools close to the Clairwood Logistics Park site through the Siyakha Education Trust.
The fund is the third largest property fund in SA, and is listed on the Johannesburg Stock Exchange. It has a portfolio of retail, commercial and industrial properties across the country. At the end of 2015, Fortress was recognised as the top company in the Sunday Times Top 100 companies list, which tracks the best performing businesses listed on the Johannesburg Securities Exchange over a five year horizon. This is the first time that a property company has won the award.