08 Feb 2008
Demand for property in the Kouga Municipality District is on the up as foresighted investors turn their focus to where the country's next nuclear power station might be erected.
"Talks about the proposed nuclear power station have been rife for the past 15 years and in 2007 definite movement sparked a rise in foreign interest in commercial and industrial land as well as in properties suitable for accommodation purposes," says John Cooper of Chas Everitt in St Francis Bay.
Thyspunt Escom favourite?
The Kouga Region includes the towns of Jeffrey's Bay, St Francis Bay, Humansdorp and smaller beach towns such as Oyster Bay - the latter lies within 6km from Thyspunt, one of the sites earmarked by Escom as a possible location for South Africa's second conventional nuclear reactor. Building could commence as soon as towards the middle of 2009 with the aim of commissioning the first unit in 2016.
Though Thyspunt is one of five sites identified by Escom in the 1980's and currently under investigation by means of an Environmental Impact Assessment (EIA), Escom already owns prime land, including a beach-strip, where the nuclear power station could be based.
Coupled with this, factors such as the area's geologically sound sub-structure, which will protect an installation against earth tremors, as well as the power consumption needs of the Coega project, are mentioned as factors which could swing the vote in favour of the Thyspunt-site.
"Many interested investors strongly believe that Thyspunt will be chosen for this project and are anxiously awaiting the announcement of the chosen site," says Hennie Griesel, Principal of Realty 1 in Jeffrey's Bay.
Demand already outstripping supply
Further speculations of the Thyspunt site to be favoured for this approximate R100bn project are fuelled by the astronomical developments, both residential and commercial, which are currently stimulating economic growth in the area, resulting in the area's infrastructure being upgraded.
Fountain Estates, the 600 hectare residential, retail and commercial development situated off the N2 on the main access route to Jeffrey's Bay, attracted national attention when the proposed budget of R2bn, as established in 2005, proved to be insufficient to satisfy market demand.
Construction of this development, now with a budget of R3,5bn as announced in December and thus one of the largest in the country, has commenced and will comprise of a 40,000sqm regional mall - Fountain Regional Mall - due to open in October 2008, an industrial park and an equestrian estate. The Fountain Regional Mall has attracted national retailers which will constitute 80% of all tenants.
Adjacent to this mega-development is the almost 1,000 hectare Jubilee Golf Estates, boasting an 18-hole course carrying the world-renowned Nicklaus Design and co-developed by Golf Data.
Economy will be stimulated
Local developer of Fountain Estates, Oswald Buchner, who heads the Büchner Propvest Group, supports the proposal of a nuclear power station at Thyspunt and cautions residents not to fear the idea of nuclear activity in the area as modern technology is far advanced.
"Jeffrey's Bay is one of the fastest growing towns in South Africa with a recorded 10% growth rate per year," Buchner says.
According to him research has shown that developments such as shopping malls have a positive effect on property price growth in the area, and this, he says, "has already commenced on the back of the Fountain Estates development".
"The prospect of a nuclear power station in the region will only stimulate the region's economy further," he predicts.
Property price growth not the only positive spin-off
With the unemployment rate in the Eastern Cape above the national unemployment rate and currently, according to Realty 1's Hennie Griesel, "the highest in the country", job creation as a result of such a project should be welcomed.
"Major investment opportunities will be created which will lead to much needed job creation," he says.
Cooper adds that an approximate 8,000 jobs could be created during construction of the nuclear power station and a total of 4,000 permanent job opportunities, both semi-skilled and skilled, will follow after completion.
"What Koeberg did for Cape Town, Thyspunt will do for our region. We need growth," he says.
Cooper and Griesel agree that property price escalation will follow on the back of the nuclear development. "We always welcome market stimulation and the proposed nuclear development will be a phenomenal stimulant to the area as it will spark greater demand for property which, in return, will lead to property price growth," Griesel says.
Rental demand in Oyster Bay on the up
Confirming this belief is Elmarie Meyer of Oyster Bay Properties, who says that the proposed nuclear development is a constant topic of conversation amongst interested property buyers in the area. According to her there has been a sharp increase in enquiries for rental properties from contractors.
"Properties in Oyster Bay still offer excellent value for money, with entry-level prices for a vacant stand of 700sq m and situated within 400 metres from the beach, averaging around R450k and up," she says.
Stands of 870sqm with direct access to the beach carry price tags of R1,7m, while entry-level freestanding properties sell from R1,4m for homes measuring just under 100sqm, though these prices are expected to soon be on a sharp up.
But, warns former chairperson of the St Francis Bay Residents Association, Harry Weistra: "There are many valid arguments against the proposed nuclear power station, such as the effect it will have on our region's main industries, namely fishery, dairy and tourism."
"The area will be negatively influenced if only because of perceptions people have about an area - as well as the products it deliver - in which a nuclear power station is in operation."
He points out that foreigners are far more environmentally aware and that the Kouga region will lose its allure.
But Erna Roux, chairperson of the local Residents Association, says residents in the Oyster Bay area have been positive about the possibility of a nuclear station.
"A general meeting between residents and Escom, scheduled for the beginning of March, will confirm if this is still the status quo," she says.
SA in energy crisis
An announcement about the chosen site is not expected before next year after which construction is expected to start without delay. Except for Thyspunt, the sites currently under investigation as part of the EIA are the Western Cape's Bantamsklip and Duynefontein, and Brazil and Skulpefontein in the Northern Cape.
The initial phase will concentrate on generating about 4 000MW with provision being made for future expansion. The proposed nuclear power station will be of the pressurised water reactor type and will include a nuclear reactor, a turbine complex, spent fuel, nuclear fuel storage facilities, waste-handling facilities, intake and outfall basins and auxiliary services infrastructures.
Cooling water for the nuclear power station will be used directly from the sea.
The entire development will require 31 hectares.
Griesel points out that the country has lost substantial revenue since the beginning of the year as a direct result of rolling blackouts. "The country's power crisis is damaging our image internationally. If we want overseas investors to take us seriously, then we need power and for that reason, Escom can build another 10 stations if needed," he concluded. – Mariana Martin, East Cape Property Guide
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