The availability of skilled labour is the main driver behind the high occupancy rates at Eastern Cape Development Corporation (ECDC) industrial and commercial properties at Fort Jackson, according to ECDC executive manager of properties Luyanda Tsipa.

Since January last year approximately 16 companies have relocated to the area. ECDC owns about 50 of the 80 properties in the area with a 95% occupancy rate.

"Investors are attracted to the area because of the availability of skilled labour like machinists.

"The majority of the properties are used for manufacturing, warehousing, automotives, mechanical workshops and a few textile industries," says Tsipa.

She says ECDC tailors its properties according to the requirements of the investors because some "investors require the basic structure while others require more specialized structures." The more profitable businesses are those that have product diversity or are specialized, whilst half of the investors are from outside the province.

She adds that the challenge is that some of the structures are vandalized particularly the unoccupied ones "no matter what safety measures we put in place." It is concerning that the outlay for security doesn't always translate into revenue for ECDC.

ECDC provides the basic structure, health and office facilities with rates starting at R6 per square meter.

ECDC generates about R200 000 per month from Fort Jackson rentals, with the majority of this revenue going to municipal rates and taxes.

"Part of our strategy is to evaluate certain assets against our mandate. In some cases, it may be more appropriate to work with other government institutions like Buffalo City Municipality (BCM) who are willing to take over some of the vacant Dimbaza industrial sites for other purposes, such as housing" says Tsipa.

She adds that the Dimbaza properties are less successful due to factors such as location and proximity to markets and the port.

Many of the properties in Dimbaza have low occupancy rates and are not attractive to investors because the incentives offered previously are no longer available. Plans are underway to look at how ECDC can reduce its exposure in this area, whilst efforts will continue to encourage some investors through lower rental rates to the area and maintenance will be done on a need basis.

She explains that it is profitable to stay in Fort Jackson for developmental purposes because "ECDC uses the revenues to develop new properties and maintain existing ones." ECDC may in certain instances consider lower rental rates as an incentive to investors.

For ECDC media relations

Lunga Mtshizana

SMG Africa

Telephone 043 726 8833

Email lunga@smgafrica.com