The Human Impact of Property Development: Establishing socially conscious economic hubs

The approximately 80km stretch of road has always had potential, and in recent years, the adjacent areas have become a central part of promoting economic development across KZN, a province that, with the right investment, could compete with South Africa’s other economic hubs.

This month, we’ll witness the grand opening of the 100-hectare Westown Precinct – a mixed-use urban centre that has been dubbed “The New City of the West”, situated squarely between Durban and Pietermaritzburg.

This multi-phase urbanisation project is expected to create 8,500 permanent jobs and attract R15 billion in investment over the next decade. Its core focus is upgrading local food, water, medical, educational, and environmental infrastructure. It is the first of many developments contributing to the eThekwini municipality’s Shongweni Urban Development strategy and a proud collaboration between local government and the private sector (including the Fundamentum Property Group as developer, and Absa’s Corporate and Investment Banking as the primary funder, providing a R1.5 billion investment).

Absa has actively participated in financing a significant pipeline of catalytic property developments in the towns and cities of KZN, because improving the functionality of cities not only increases economic potential, but social potential as well.

Considered property development not only creates jobs in the construction phase (such as the 15000 positions created during Westown’s construction) but following the project’s completion too. When infrastructure improves, so too does the attractiveness of a given area, bringing in new residents, businesses, and increased property values – triggering knock-on effects that benefit local economies.

We’ve seen this in the Westown precinct, which is already populated with a high-street retail experience in its first phase, bringing new business and shopping opportunities to residents, but in the coming years will also house a commercial hub for motor vehicle construction, approximately 3000 homes, and an industrial park for warehousing and logistics.

This bid towards job creation and economic development was also at the centre of another of Absa’s recent property development investments across KZN. The R2.2 billion Umhlanga Arch development – a combination of residential, office, hospitality, and retail spaces – created hundreds of jobs and remains a bolstering force to Umhlanga’s tourism sector. Similarly, our R1.5 billion investment into the Sibaya Coastal Precinct, Salta Sibaya, saw a record-breaking number of sales of its residential properties and has secured sales in excess of R2 billion since it launched in 2021.

Yet while cities are engines of economic growth, the World Bank warns of the complexities of urbanisation: “Cities must meet the growing global demand for more and better jobs, efficient infrastructure and services, and affordable housing, especially for the nearly 1 billion urban poor living in informal settlements… However, the rapid pace and scale of urbanisation is also bringing significant challenges.”

Beyond providing business opportunities, such development projects must focus on social value, and meeting the ever-changing needs of local communities. This ethos has guided Westown’s future, where beyond its residential capabilities, will improve local road, water, and power infrastructure. This alongside the development of a private hospital, a training centre and skills development programmes, integrated public transport, and new schooling and education facilities.

Environmental sustainability is imperative as well; green spaces and preservation efforts are just as important as job creation. The right type of urban development starts green infrastructure planning and investment. The Westown Management Association has a key focus on developing running, cycling, and equestrian trails, while also managing wetlands rehabilitation programmes to ensure the newly industrialised area doesn’t harm the surrounding natural environment.

However, facilitating conscious urban development – especially in rapidly growing areas like KZN – requires agile, innovative financing solutions. The province’s property sector is evolving rapidly, with large-scale, infrastructure-heavy developments reshaping the region’s economic landscape. However, the capital intensity of these projects often presents significant funding challenges for developers, particularly in securing the liquidity needed to bridge financing gaps and optimise capital efficiency. Innovative funding solutions, such as mezzanine development finance, have become a critical enabler in unlocking these opportunities and driving sustainable growth.

By utilising mezzanine finance, developers gain access to additional capital without overly diluting equity positions, allowing them to maintain strategic control while securing the funding necessary to complete large-scale projects. This approach not only enhances financial agility but also unlocks value in high-potential developments that might otherwise face funding constraints.

KZN continues to experience strong property market growth, particularly in key urban expansion nodes, which means such funding solutions will remain important drivers in unlocking the province’s socio-economic potential. As more of these development projects continue to spring up countrywide, Absa’s ambition will be to invest in the right projects across Africa, finding the balance between economic and social growth.