KwaZulu-Natal unveils R360.1m development

This proposed development comprises a Beach Resort on a 195 ha site. This is located in KwaDukuza, in the Ilembe District Municipality (KwaZulu-Natal) and adjacent to Prince’s Grant Golf Estate. The project is wholly owned by the community of Nonoti which is formed by 300 households.  In this project, the community is represented by the Inqaba Community Trust.  The Trust acquired land through a successful negotiated land restitution settlement pursuant to a land claim that was lodged by the community.

GEOGRAPHIC COVERAGE

Nonoti Beach Resort is located at KwaDukuza (Stanger), within the iLembe District Municipality, next to Prince’s Grant Golf Estate. The site is easily accessible from the N2 freeway to KwaDukuza, approximately a 45 minute drive from Durban and about 20 minutes away from the King Shaka International Airport. The site, which has a sea frontage of 750m, forms part of the KZN’s northern India Ocean coastal belt that stretches from Ballito to Richards Bay. This belt has been identified as prime for beach resort developments.

CONCEPT 

The concept includes

  • Accommodation of a total of 822 beds with sea views is made up of
    • 4 star Hotel of 202 rooms comprised of standard, deluxe and superior rooms
    • 4 star of 40 Self-Catering units
    • 3 star of 30 Self-Catering units

All accommodation facilities have own swimming pools. They all have walkways that lead to the beach and other facilities. The service centre is central to all accommodation facilities. This commercial site has potential to develop 500 more accommodation units. This can be the next phase of the development, depending on the success of current phase.

  • Restaurant facilities include
  • 2 x restaurants
  • 1 x coffee shop
  • 1 x beach boma
  • 1 x beach bar
  • 1 x pool bar
  • Conference facility
  • 200 seater
  • 100 seater plenary facility
  • Activities are available within the resort and some in the neighbouring attractions
  • Wellness centre
  • Curio/beach/surf shop
  • There are 4 golf courses within a 20 km radius
  • Cultural entertainment is offered by neighbouring communities within a radius of 10 km.
  • Day excursions and visit to Big 5 game reserves can be arranged for guests.

KEY  PROJECT METRICS

FEASIBILITY STUDY

The pre-feasibility and feasibility studies were conducted. The outcome of these two studies was recommending the development of this resort should take place as per the concept above.

EXPECTED CONTRACTUAL /COMMERCIAL STRUCTURE

A private company (Project Company) will be formed by the Trust for the purposes of the project.  This Project Company will then enter into a long-term lease agreement with the Trust. The project owners are looking at forming partnership with potential equity investors, hospitality operating/management companies and service providers where need has been identified.

EXPECTED CAPITAL COST REQUIREMENT

The base model in the business plan recommends that the project needs a capital injection of R360.1 million which includes costs for the development, professional services, pre-opening expenses, FFE and working capital.  The cost per key has been estimated at R1.3 million. The project requires equity of 40% and loan finance of 60%. One of the project facilitators, Industrial Development Corporation (IDC), is willing to look at a long term loan financing that can be repayable over a period of 12 years with a 2 year moratorium.

FINANCIAL FEASIBILITY STUDY

financial info

PROJECT TIMELINES

  1. Appointment of operating company will be in 2013
  2. EIA and rezoning to be completed in 2013
  3. Construction is expected to commence in 2014
  4. Operations are expected to commence in 2015/2016

CONCLUSION

This project has drawn a lot of attention from potential investors and management companies. The Project Steering Committee (PSC) would like to engage companies that have expertise in working with domestic and international market. The project also needs an equity partner. IDC is a potential partner with the community in the development. All other stakeholders that form part of the PSC are facilitating the project on behalf of the community.

  •  Presented by: Thokozani Chili, Project Manager: Services (Tourism) at Trade and Investment KwaZulu-Natal.

Author: Muzi Mohale

Hi there, am your host and I blog about the tourism industry in South Africa. You're also welcome to contribute your expert content on matters affecting the industry. You can reach me on muzi[at]tourismedition.com

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