As an entrepreneur, building a business must give one an eminent sense of pride. To develop a project that will potentially enhance thousands of lives and bring economic prosperity to a region, leaves a far greater legacy. That is the dream of Gerald Mundell, owner and developer of the Stockowners Business Park, which is fast becoming a reality.
Mundell almost acquired the property site by chance, the businessman had made his name for twenty years in the transportation industry, through his ownership of Ellington Transport and King Concrete Pumping and decided to attend a local auction – and as he explains, his purchase has very much occupied the last seven years of his life:
“I bought Stockowners in 2005 at an insolvency auction. It was more by chance and a spec-buy and at the time I had no firm plans on what to do with the land but we looked at the possibilities to develop it.”
At the time, one of the key assets on the 48 hectare site was a 1,000 square metre office space. Within that complex resided a property valuation company called Mills Fitchet, who provided invaluable assistance to Mundell, as he sought options for his land purchase.
“One of the owners was a guy called Stephen de Klerk who ultimately became the project manager for the Stockowners project and we have been blessed to be able to use his knowledge and experience,” he affirms.
The Business Park is destined to become one of the pre-eminent business, commercial and industrial hubs on the Midlands N3 corridor between the coast and the reef. The development on the Howick North-Tweedie interchange presents an unrivalled opportunity in a prime urban-rural location, with an envied lifestyle and competitive incentives.
Upon completion, it will encompass 81 mixed use and service sites spread out across the 48 hectares and Mundell says that its strategic location makes it an attractive proposition to businesses:
“We are located right next to the busiest road in Africa, just 101 kilometres from Durban, our main port. On one side we have the N3 and on the other side of the park are excellent rail links to Johannesburg.
“Historically there was not a lot of industry in the Howick area, the Dunlop factory, manufacturing rubber products, was probably the biggest business and there is quite a large focus on agriculture and dairy farming in the region.”
Presently Mundell is in the second phase of selling property space, but the economic downturn to an extent has hindered progress:
“We are currently selling property and we are aiming for a target of 60 per cent of the Business Park before we look to start construction,” he states. “We are at the moment about 50 per cent there and hoping to reach our goal by June or July of 2013. At that point we will begin bulk service construction, to build road, water, sewerage and electricity supplies.
“We have been selling for exactly eleven months (at the time of speaking) and we anticipated a slow sell-out rate and we are on target. It took us seven years to get to this stage though and the amount of red tape involved in converting farmland to industrial land did delay us. It has been extremely challenging and a lot more expensive than we thought it would be.
“The economic downturn did also cause us to delay our launch by a year and a half but that wait for sentiments to change has proven worthwhile. We are very positive and South Africa is in a strong position with local industries doing very well.
“We recently made a sale to Eskom and they will build a power station on-site next July, tests have already been carried out on the soil and agreements have been signed. MTN, one of the biggest communications companies in South Africa have also signed a deal with us and will be constructing a 25 metre mast to provide the very best wireless communications.”
Mundell says that the current mix of future tenants is varied and includes everything from an earth moving construction company, a truck retailer, a laminating company, a pallet nail business and an African hide company, that tans and cures animal hides before manufacturing them into bags and shoes.
“Stockowners Business Park is also home to a seed potato lab and three property speculators. Our biggest sale to date has been to a local developer who bought the existing office park in December,” he adds.
“We are currently working on a couple of deals, which, if successful, will meet our target of 60 per cent. One deal relates to the biggest retail site on the Park, while the other is for a 2.5 hectare factory. Both look very promising but talks remain ongoing.”
The Business Park has a number of positive benefits for industry and Mundell has been struck by the amount of interest generated as far away as Johannesburg:
“Howick has never experienced an influx of business and opportunity on this scale before and it has become a popular area for Johannesburg businesses. Many of these companies are considering moving their manufacturing operations out of the city and Stockowners Business Park offers a number of advantages, not just good transport links:
“For starters we have 81 units available, varying from 1,000 square metres up to 58,000 square metres, and the way we have laid the property out, enables businesses to consolidate more than one property.
“The Howick area is pretty built-up and well-supplied with amenities for people looking to relocate; Pietermaritzburg is only a 20 minute drive and the area has some of the country’s best schools and a hospital currently undergoing a R150 million expansion.
“The Midlands Meander, which is a great source of tourism, pretty much starts at Stockowners Business Park and its route offers stunning scenery, a wide choice of restaurants and small craft industries.”
Another benefit for prospective tenants comes in the form of rates concessions. Mundell says that the business has worked closely with the local municipality and may be entitled to rates holidays and discounts on services like refuse removal.
Part of that benefit will come from the revenue stream that the Business Park is expected to create and Mundell estimates this at between R6 million and R9 million, which will of course further benefit the whole region.
“We also estimate that during the construction phase we will create between 400 and 1,000 temporary jobs and long-term the park will generate between 2,000 and 5,000 permanent jobs.”
As with all construction projects these days, there are a number of environmental considerations currently on the table. Whilst Mundell accepts he is relatively new to this aspect, he is keen to develop a green side to the project;
“As a fresh new industrial park we have the perfect opportunity to capitalize on our design and we have already created a 4 kilometre green belt. The landscaping has been well-thought out and we feel that having a strong green feel to the development is more likely to attract businesses.”
Funding remains a challenge in the current economic climate and whilst Mundell does not rule out working with the banks, he feels that they are all in the same boat at present and have similar strict lending criteria. Alternatively, he is actively looking for financial support from within the private sector and is currently in discussions with two property developers who are prospective investors.
Right now it is hard to put an exact figure to the Stockowners Business Park project, Mundell thinks that the total spend will fall somewhere between R500 million and R1 billion but is confident of making a return within four years.
“That means Stockowners will remain my short-term priority but I am looking at a couple of other property investments; one is holiday resort-based while the other is a housing project. These may come to fruition in the next three years. I am also looking at developments just off the Namibian coast, where a new international airport is being built.
“It is important to keep an eye on opportunities as I guess I am an entrepreneur now,” he jokes.