Real Estate Investor Magazine South Africa October 2015 | Page 47

MBDA UPGRADES STIMULATE PRIVATE SECTOR INVESTMENT AND JOB CREATION Resulting from the MBDA’s public investment in the inner city of Port Elizabeth, Nelson Mandela Bay The outcomes of the 2014 primary research, in respect of private sector investment, indicated the following: 29.8% of businesses within Central made some form of improvement to their property in 2014. In comparison, 75.0% of residents who indicated that they owned their properties made improvements in 2014. The average value of improvements made by businesses was R45 000, while for residents it was R21 667. Based on the average value of improvements, Central businesses invested R3.4 million in 2014. A sharp fall-off in investment by Central businesses and residents has been evident since 2013. Engagements with businesses and residents in the area have indicated that the primary reason for this decline is the poor overall economic environment (i.e. slow growth in domestic consumption expenditure resulting in less revenue for upgrades and/or business expansion). Businesses, as evidenced by survey results, are also less confident about future economic prospects, rising crime levels, and poor levels of service delivery (including maintenance). The total value invested by Central businesses into their properties between 2009 and 2014 was R50.2 million. Jobs in Central are on the up The survey outcomes indicate the following in terms of employment creation in Central: 23.5% of surveyed businesses indicated that they had hired additional staff in 2014. Central businesses hired on average, 3.2 new staff members in 2014. Using this average number, as well as the number of Central businesses, it is estimated that 193 new jobs were created in 2014. Between 2010 and 2014 an estimated 1709 new jobs have been created. The businesses surveyed in 2014 employed approximately 1 360 people. Of this total, 81.8% were employed on a permanent basis (2013: 75.9%) and 18.2% were employed on a part-time/ casual basis (2013: 24.1%). Upgrades encourage conducive trading environment The survey outcomes indicated the following key findings about the business trading environment within Central: 15.3% of businesses surveyed (39) indicated that they had been operating for less than one year meaning that they only started operating in Central in 2014 (2013: 13.1%). New start-up businesses are a positive sign for the area as they are both an indicator of positive sentiment about the area and they tend to spend more money in the local area as opposed to larger companies which tend to have central purchasing offices. The majority of new businesses started in Central during 2014 were apparel and personal care stores (25.6%). Over 50% of new business start-ups are located in either Govan Mbeki Avenue (28.2%) or Parliament Street (23.1%). Other popular locations for new business start-ups were Rink Street, and Strand Street (both 20.5%). Business confidence shows positive signs in Central Businesses were asked how they would rate their overall confidence in the business environment in Central (i.e. prospects growth, trading conditions etc.). Almost two thirds of businesses surveyed (62.7%; 2013: 55.6%) indicated that they were either extremely positive (7.1%; 2013: 18.8%) or positive (55.7%; 2013: 36.8%) about the current Central operating environment. Construction in Progress For more information please contact: Luvuyo Bangazi | [email protected] | www.mbda.co.za