Theewaterskloof Municipality SDF

Economic Inputs into SDF

Prepared for: Urban- Dynamics Prepared by: Urban-Econ

Spatial Economic Input 1 Theewaterskloof Municipality SDF

Contents Acronyms ...... 3 Tables & Figures ...... 4 Section 1: Background ...... 5 1.1 INTRODUCTION...... 5 1.2 GOALS & OBJECTIVES OF REPORT...... 5 Section 2: Status Quo ...... 6 2.1 INTRODUCTION...... 6 2.2 DEMOGRAPHICS OVERVIEW ...... 7 2.3 ECONOMIC OVERVIEW ...... 9 Section 3: Policy Review & Economic Growth Potential ...... 11 3.1 INTRODUCTION...... 11 3.2 TWK VISION 2030...... 11 3.3 TWK Local Economic Development Strategy (LED) 2009 ...... 15 3.4 THEEWATERSKLOOF GREEN ECONOMY ...... 18 3.5 THEEWATERSKLOOF STRATEGIC TOURISM STRATEGY ...... 18 3.6 SPATIAL IMPLICATION ...... 18 3.7 ECONOMIC IMPACT ...... 25 3.7.1 QUANTIFYING ECONOMIC IMPACT...... 26 3.7.2 ECONOMIC IMPACT MODELLING ...... 30 Section 4: Space Demand Analysis ...... 31 4.1 INTRODUCTION...... 31 4.2 MODELING APPROACH ...... 31 4.2.1 RESIDENTIAL MARKET DEMAND ANALYSIS ...... 31 4.2.1.1 DEMAND ANALYSIS ...... 31 4.2.1.2 IMPLICATION ...... 34 4.2.2 INDUSTRIAL MARKET DEMAND ANALYSIS ...... 34 4.2.2.1 DEMAND ANALYSIS ...... 35 4.2.2.2 IMPLICATIONS ...... 38 4.2.3 COMMERCIAL MARKET DEMAND ANALYSIS ...... 38 4.2.3.1 OFFICE MARKET DEMAND ANALYSIS ...... 38

Urban-Econ 2012© Spatial Economic Input 2 Theewaterskloof Municipality SDF

4.2.3.2 RETAIL DEMAND ANALYSIS ...... 40 4.2.4 COMMERCIAL MODEL IMPLICATIONS ...... 42 4.2.5 SHORT STAY ACCOMMODATION MARKET DEMAND ANALYSIS ...... 42 4.2.5.1 DEMAND ...... 43 4.2.5.2 IMPLICATIONS ...... 44 4.2.6 INSTITUTIONAL MARKET DEMAND ANALYSIS ...... 44 4.2.6.1 DEMAND ANALYSIS ...... 45 4.2.6.2 IMPLICATIONS ...... 46 4.3 SYNTHESIS ...... 46 Section 5: Inputs into SDF ...... 49 5.1 INTRODUCTION...... 49 5.2 SDF INPUTS ...... 49 5.3 SDF IMPLICATIONS ...... 53 5.4 CONCLUSION ...... 54

Urban-Econ 2012© Spatial Economic Input 3 Theewaterskloof Municipality SDF

Acronyms

CAPEX Capital Expenditure

CIBD Construction Industry Development Board

CPI Consumer Price Index

DBSA Development Bank of South Africa

ELF Early Learning Foundation

FET Furthur Education and Training

GGP Gross Georgraphical Product

GLA Gross Leasable Area

HH Households

HIL Household Income Level

I/O Input Ouput

IDP Integrated Development Programme

IPD Investment Property Databank

LED Local Economic Development

LIP Local Industrial Park

LM Local Municipality

OPEX Operational Expenditure

RDP Reconstruction and Development Program

SAB South African Breweries

SDF Spatial Development Framework

SIC Standard Industrial Classification

SME Small Micro Enterprise

TWK Theewaterskloof

Urban-Econ 2012© Spatial Economic Input 4 Theewaterskloof Municipality SDF

Tables & Figures

TABLE 2.1: POPULATION DISTRIBUTION ACROSS THE MAIN URBAN AND RURAL SETTLEMENTS, 2001 TABLE 2.2: HOUSEHOLD INCOME DISTRIBUTION, 2001 TABLE 2.3: HOUSEHOLD INCOME IN THEEWATERSKLOOF, 2007 TABLE 2.4: GGP AND EMPLOYMENT CONTRIBUTIONS PER INDUSTRY TABLE 3.1: TWK PROJECT LAND-USE CLASSIFICATION SUMMARY TABLE 3.2: TOTAL ECONOMIC IMPACT (CAPEX) TABLE 3.3: ESTIMATED ECONOMIC IMPACT OF TWK POLICY INTERVENTIONS TABLE 4.1: NUMBER OF HOUSEHOLDS TABLE 4.2: HOUSEHOLD INCOME LEVELS TABLE 4.3: RESIDENTIAL DEMAND TABLE 4.4: NET EFFECTIVE DEMAND FOR RESIDENTIAL PROPERTY, TWK LM, 2011-2021 TABLE 4.5: FORMAL EMPLOYEES, MANUFACTURING SUB-SECTORS, TWK LM, 2011 TABLE 4.6: EMPLOYMENT PARAMETER, INDUSTRIAL DEMAND TABLE 4.7: EFFECTIVE DEMAND, INDUSTRIAL DEMAND, STUDY AREA, 2011- 2021 (M²) TABLE 4.8: NET DEMAND FOR INDUSTRIAL SPACE, TWK LM, 2011-2021 TABLE 4.9: OFFICE DEMAND PARAMETERS TABLE 4.10: OFFICE DEMAND (M2) TABLE 4.11: HOUSEHOLD NUMBERS & AVERAGE HOUSEHOLD INCOME TABLE 4.12: RETAIL EXPENDITURE PATTERNS TABLE 4.13: MARKET LEAKAGES TABLE 4.14: TOTAL ANNUAL RETAIL EXPENDITURE (RAND/ANNUM), 2011 TABLE 4.15: ANNUAL TRADING DENSITIES TABLE 4.16: DEMAND FOR RETAIL SPACE, 2011-2021 TABLE 4.17: NET DEMAND FOR COMMERCIAL PROPERTY (OFFICE & RETAIL) IN TWK LM, 2011-2021 TABLE 4.18: PURPOSE OF VISIT (TWK, 2010) TABLE 4.19: PROJECTED NUMBER OF BEDS SOLD IN THE TWK TABLE 4.20: NET DEMAND FOR SHORT STAY ACCOMMODATION IN THE TWK LM, 2011-2021 TABLE 4.21: EDUCATIONAL FACILITIES IN TWK TABLE 4.22: INSTITUTIONAL TARGET POPULATION (TWK, 2011) TABLE 4.23: INSTITUTIONAL DEMAND FOR TWK TABLE 4.24: NET DEMAND FOR INSTITUTIONAL FACILITIES IN THE TWK LM, 2011-2021 TABLE 4.25: SYNTHESIS OF SPACE NET DEMAND MODELLING RESULTS TABLE 5.1: SDF IMPLICATIONS TABLE 5.2: SDF LAND-USE REQUIREMENTS SUMMARY

FIGURE 2.1: THEEWATERSKLOOF MUNICIPALITY LOCALITY FIGURE 3.1: CAUSE-EFFECT RELATIONSHIPS RESULTING FROM THE PROPOSED TWK POLICY INTERVENTIONS FIGURE 4.1: RELATION BETWEEN THE BUSINESS CYCLE AND PROPERTY MARKETS

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Section 1 : Background

1.1 INTRODUCTION

Urban-Econ was approached by Urban Dynamics to provide the economic inputs to ensure that the Spatial Development Framework for Theewaterskloof (TWK) is credible as prescribed by the provincial planning department of the Western Cape. The purpose of this report is to provide an overview of the various spatial interventions which could result from the implementation of the TWK policies and programs. Urban-Econ aims to provide an economic benchmark for all new land uses proposed for the TWK region in order to assess the demand for land per land uses across the municipality. The implications of this is that spatial planning will now be aligned with economic demand principles to ensure that the land use activities are meeting a growing demand for the land use and that sufficient land is provided within the plan to accommodate future growth of the region.

1.2 GOALS & OBJECTIVES OF REPORT

Urban Dynamics requires an independent, specialist economic assessment of the growth potential of the TWK economy in order to determine the future demand for land within the TWK area. The analysis should indicate whether the proposed development activities in the draft TWK SDF will allow for accelerated economic growth that is in line with the economic land use demand models for the different markets.

Goals and objectives identified include the following:

1. First and foremost, the ultimate goal of this report is to assist in ensuring that the management of the spatial development of the TWK area is sustainable 2. To provide a dynamic market perspective of the current and future characteristics and trends in the above area 3. To gain a better understanding of the economic profiles and growth rates of the study area 4. To forecast demand for the various study areas concerned 5. To provide strategic recommendations and guidelines, for the draft SDF 6. To coincide and align strategies and economic principles with the draft SDF

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Section 2: Status Quo

2.1 INTRODUCTION

The Theewaterskloof Municipality is located in the Overberg District of the Western Cape, South Africa. In 2010 the municipal consisted of a total population of 89, 874, which made up 41.92% of the Overberg District municipality (which also consists of the Swellendam, Cape Agulhas, Overstrand and Overberg Local Municipalities) and 1.72% of the total Western Cape population. It is the largest local authority in the Overberg District and has the N2 highway running through it connecting Cape Town with the Garden Route. The N2 highway also connects many of the main towns located within the municipal area; namely Caledon (which is the seat of the local municipalities headquarters), Grabouw, Botrivier and Riversonderend. Other main urban areas are Villiersdorp, Greyton and Grenadendal.

Figure 2.1 below shows the location of Theewaterskloof local municipality within the Overberg District municipality.

FIGURE 2.1: THEEWATERSKLOOF MUNICIPALITY LOCALITY

The Theewaterskloof municipality has strong links with the neighbouring municipal areas of Cape Town and Stellenbosch and is regarded as a small player within the Cape Town functional region with includes the City of Cape Town, Swartland, Saldanha, Drakenstein, Stellenbosch and Overstrand. A number of workers living in the municipal area commute into Cape Town, Somerset West, Bellville, Stellenbosch and Overstrand for work, and on the contrary most managers working within the Theewaterskloof municipal area reside in Somerset West and Overstrand, and commute into Theewaterskloof (TWK LED Strategy, 2009).

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2.2 DEMOGRAPHICS OVERVIEW

As mentioned before, in 2010 the total population of the Theewaterskloof municipal area was 89, 874, with 70.33% of this population being coloured; 20.85% being black; and 8.68% being white. From 1995-2010 the population of the municipal area has been growing at an average rate of 1.67% per annum and in more recent times (2001-2010) the average population growth has slowed significantly to just 0.38%. This trend runs contrary to the population growth trends of the Overberg District as a whole, which was identified as one of the fastest growing populations in the country after Johannesburg and Tshwane in 2009. Between 1996 and 2001 the district population more than doubled, however more recent growth has been recorded at 1.43%. The bulk of the growth (1996-2001) was absorbed by the Theewaterskloof and Overstrand municipalities which are both gateways for people migrating from the Eastern Cape into the Western Cape in search of work.

The distribution of the Western Province population in urban and rural settlements in 2010 shows that 87.50% of the provincial population live in formal urban areas; while 6.99% live in informal urban areas; and only 5.51% living in formal rural settlements.

Table 2.1 below shows the distribution of the population within the Theewaterskloof municipal area, across the major urban settlements as well as the smaller rural settlements. The data set used below pertains to the 2001 census data, as the latest figures regarding urban/rural distribution was not available.

TABLE 2.1: POPULATION DISTRIBUTION ACROSS THE MAIN URBAN AND RURAL SETTLEMENTS, 2001 Town/Settlement Urban/Rural Settlement in Percentage of total Theewaterskloof Theewaterskloof population Bosmanskloof Rural 0.84% Botrivier Urban 4.34% Caledon Urban 11.41% Dennehof Rural 0.06% Elgin Forest Reserve Rural 0.01% Genadendal Urban 5.00% Grabouw Urban 23.14% Greyton Urban 1.18% Hottentotsholland Nature Reserve Rural 0.00% Lebanon State Forest Rural 0.00% Middleton Rural 0.54% Nuweberg State Forest Rural 0.00% Riviersonderend Urban 3.86% Riviersonderend State Forest Rural 0.02% Theewaterskloof Urban 41.48% Villiersdorp Urban 8.12% (Source: Quantec Easydata, 2011)

Table 2.1 above shows that only 1.47% of the total Theewaterskloof municipal population lives in rural areas, while the remaining 98.53% live in the major urban areas. Prior to 2001 the municipal area displayed positive in- migration trends (individuals, initially living outside the municipal area, moving into the area to occupy permanent residence). In 2001 the total population was 93, 274 within the municipal area. In 1996 the area recorded 354 (0.38% of the 93, 274 population total in 2001) new individuals migrating into the area. This rose to 2, 565 (2.75% of the 93, 274 population total in 2001) individuals migrating into the area in 2001. Due to the fact that the latest migration figures for the area were not available for this analysis, this report reflects 2001 census data.

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The total number of households in the municipal area recorded in 2010 was 20, 288 and grew at an average rate of 1.45% from 1995-2010, however in more recent times this declined to a negative average growth rate of -0.97% (which indicates a greater number of households have exited the municipal area as opposed to those moving into the area).

The gender profile of the Theewaterskloof municipal area in 2010 shows a greater number of females (50.55% of the total population) as opposed to males (49.55%). The age profile of the area in 2010 shows the largest concentration of the population fall within the economically active age groups of 20-49 years with 47.52% falling within these age groups. The second largest percentage of the population is considered the youth age groups (0-14 years) with 28.23% of the population falling within these age groups. The area also has a very small percentage of retirees (65 years and above) with only 4.13% of the population falling within these age groups in 2010.

Table 2.2 below shows monthly household income distribution within the Theewaterskloof municipality across the various urban and rural settlements in 2001, while Table 2.3 shows the household income distribution within the municipality across the various population groups (white, black, coloured and Asian) in 2007.

TABLE 2.2: HOUSEHOLD INCOME DISTRIBUTION, 2001 Income Category per Theewaterskloof Urban Households Rural Households month Municipality No income 36.61% 100.00% 0% R1 -R4 ,800 7.14% 96.56% 3.44% R4 ,801 -R9 ,600 25.96% 99.20% 0.8% R9 ,601 -R19 ,200 17.10% 98.96% 1.04% R19 ,201 -R38 ,400 6.22% 98.52% 1.48% R38 ,401 -R76 ,800 4.24% 99.30% 0.7% R76 ,801 -R153 ,600 1.97% 99.05% 0.95% R153 ,601 -R307 ,200 0.54% 100.00% 0% R307 ,201 -R614 ,400 0.13% 90.48% 9.52% R614 ,401 -R1 ,228 ,800 0.05% 100.00% 0% R1 ,228 ,801 -R2 ,457 ,600 0.04% 100.00% 0% R2 ,457 ,601 or more 0.01% 100.00% 0% (Source: Quantec Easydata, 2011)

Table 2.2 above shows that within the Theewaterskloof municipal area, the largest percentage (36.61%) of households in 2001 earned no form of income on a monthly basis, and a 100% of these households lived in the urban settlements (Botrivier, Grabouw, Genadendal, Riviersonderend, Greyton, Caledon and Villiersdorp). The second largest percentage households (25.96%) earned between R401 – R800 per month, of which 99.20% of households resided in urban settlements and the remaining 0.8% in rural settlements.

Table 2.3 below shows the annual household income across the various population groups in the Theewaterskloof municipal area.

TABLE 2.3: HOUSEHOLD INCOME IN THEEWATERSKLOOF, 2007 Theewaterskloof Household Income Black Coloured Indian and White Municipality Category Population Population Asian Population (Total) 5.80% 1.87% 0.00% 7.55% No income 9.96%

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Theewaterskloof Household Income Black Coloured Indian and White Municipality Category Population Population Asian Population (Total) 6.13% 0.29% 0.00% 0.00% R1-R4800 4.90%

R4801-R9600 12.53% 12.26% 2.26% 0.00% 1.04%

R9601-R19200 18.56% 9.36% 8.03% 0.00% 1.64%

R19201-R38400 24.44% 9.44% 9.39% 0.00% 11.18%

R38401-R76800 14.57% 5.73% 5.17% 0.00% 7.87%

R76801-R153600 7.12% 0.00% 2.18% 0.00% 9.96%

R153601-R307200 6.60% 0.00% 1.06% 0.00% 12.40%

R307201-R614400 0.95% 0.00% 0.69% 0.00% 0.00%

R614401-R1228800 0.37% 0.00% 0.00% 0.00% 0.89%

R1228801-R2457600 0.00% 0.00% 0.00% 0.00% 0.00%

R2457601 or more 0.00% 0.00% 0.00% 0.00% 0.00% (Source: Quantec EasyData, 2012)

Table 2.3 above shows that in 2007 the largest percentage of the Theewaterskloof municipality falls within the low household income categories (R1 – R38, 400) with 60.43% of the total population earning these levels per annum. Table 2.3 above also displays a marked improvement in the household income profile of the municipality in comparison to levels recorded in 2001 (refer to Table 2.2 ). Most notable is the significant drop in households which earn no source of income, which has dropped from 36.61% in 2001 to just 9.65% in 2007.

2.3 ECONOMIC OVERVIEW

From an economic standpoint, the Theewaterskloof municipal area is regarded as the premier location for pome fruit production. It is the country’s largest apple producing area and its third largest pear producing area. Together with the abutting municipal areas, it is a significant contributor to grain production, especially barley. The area is also regarded as one of the new first grade sites for growing sauvignon blanc grapes used in the production of wine. The area also has a small forestry area, which the Forestry Exit Reversal plans of the Western Cape have recommended be retained. The existing natural resource base of the area, provides a platform to both retain and renew the agricultural sector and to expand the conservation and related tourism activities in the area (TWK LED Strategy, 2009).

The total value of production of Gross Geographic production (GGP) in 2010 was valued at R2, 580 million and displayed an average growth rate of 3.74% from 1995-2010 fuelled predominately by the agricultural sector. In more recent times (2001-2010) the average growth of GGP in the area has decreased only slightly to 3.67%. The local municipal area accounts for 36.59% of total GGP generated within the Overberg District municipality and only 1.06% of total GGP generated within the Western Cape.

Urban-Econ 2012© Spatial Economic Input 10 Theewaterskloof Municipality SDF

Employment figures in the area for 2010 show that 42.48% of the labour force (population falling between the economically active age groups of 15-64 years) are employed in either the formal or informal sectors of the economy, with 17.95% of the population (according to the narrow definition of unemployment) being unemployed and 39.93% being regarded as not economically active or have temporarily or permanently exited the labour market. Of the individuals employed in the economy the largest percentage of these (88.81%) are employed within the formal sector of the economy with only 11.19% being employed within the informal sector.

The skills profile of the area for 2010 highlights a relatively low level of skills in the economy, with 50.62% of the work force categorised as being semi- or unskilled. The second largest percentage of the population (38.77%) are considered to be skilled workers having expertise within a limited economic field and only 10.62% of the population are considered to be highly skilled, holding down managerial or other high level positions.

Table 2.4 below shows the GGP and Employment contributions across the various industries within the economy.

TABLE 2.4: GGP AND EMPLOYMENT CONTRIBUTIONS PER INDUSTRY Industry Contributions to total GGP Contributions to total Employment Agriculture, forestry and fishing 22.23% 26.85% Mining and quarrying 0.03% 0.07% Manufacturing 15.19% 8.48% Electricity, gas and water 1.46% 0.31% Construction 6.50% 7.93% Wholesale, retail trade and 9.17% 10.88% accommodation Transport, storage and 6.07% 1.35% communication Finance, real estate and business 27.85% 19.34% services Community, social and personal 3.06% 11.79% services General government 8.44% 12.99%

Table 2.4 highlights the dominance of the agricultural sector in the area, which is the second largest contributing sector to total production (GGP) in the municipal area (22.23%) and is the most significant contributor to total employment providing 26.85% of total employment. The most significant contributing sector to total production (GGP) in the municipal area is the Finance, Real Estate, Insurance and business services sector, which falls within the tertiary or services sector of the local economy.

As mentioned afore, the largest employer in the area is the agricultural sector, with the bulk of these workers being semi- or unskilled. Due to the nature of the farming activities in the area (apples and wine farming) the area requires a number of seasonal workers to harvest crops.

Urban-Econ 2012© Spatial Economic Input 11 Theewaterskloof Municipality SDF

Section 3: Policy Review & Economic Growth Potential

3.1 INTRODUCTION

In order to establish the current economic growth which is planned for the TWK municipal area it is necessary to review all leading policy documents and highlight the aspects which will have a direct influence on the the economic spaces across each of the towns in the TWK municipality. The main policies which were reviewed include the following:

• Theewaterskloof – Vision 2030 • Theewaterskloof LED 2009 • Theewaterskloof Green Economy • Theewaterskloof Strategic Tourism Strategy

3.2 TWK VISION 2030

Achieving the 2030 vision requires a multi-pronged strategy. Five inter-related strategic thrusts have been identified, which, if actioned together, will provide the stimulus to create a quality living environment and turn the local economy around. It is hoped that through an integrated approach to these five key action areas, Theewaterskloof will become an attractive centre for investment, innovation and entrepreneurs. The five thrusts are:

1. A place to live 2. Visitor Destination 3. Centre of learning 4. Vibrant Economy 5. Low Carbon and Green Business

Each of the 5 thrusts and the policy actions have been summarised below:

1. A Desirable Place to Live

Priority and Supportive Actions • Build bridges between communities and people living in different towns with initiatives such as, for example, the Raintree initiative in Villiersdorp and using sports and music as platforms for sharing experiences • Strengthen community by addressing social challenges such as drug use and crime through initiating youth programmes • Expand the rates base in Grabouw and Caledon by unlocking the constraints to housing development (for example, the limited bulk infrastructure capacity, Act 70 of 1970 and the urban edge policy) and fast- tracking development applications in these towns. • Create an enabling framework for the development of off-grid eco-estates in the region including the creation of appropriate locational guidelines

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• Accelerate the human settlement plan to improve the living conditions of existing residents including exploring on-farm housing and transitional housing solutions. • Use the housing and infrastructure expansion to establish TWK as a leader in sustainable technologies and green star accredited buildings, as well as to support and grow construction SMEs in the region in partnership with ELF and the CIDB. • Work with relevant authorities to establish a public transport commuter link with Cape Town. • Reduce the number of indigent households by providing bridges to employment for all those who want to work.

Role of Each Town • Grabouw: This is the residential hub of Theewaterskloof, with RDP housing for indigent households, working-class families looking for gap housing and options for middle-income cluster-type housing and off-grid estates in the surrounding farmlands. • Villiersdorp: Consolidation of existing settlements and development of high-income housing options around the Dam. • Genadendal: Preservation of the historic character of the town and no planned expansion of the residential base. • Greyton: Country living housing option focused on attracting full-time residents into the existing housing stock. • Botriver : Lifestyle living on smallholder farms and retirement housing. • Caledon: As the secondary residential centre in Theewaterskloof, it will cater for high- and middle income professionals, from teachers to managers working in the region, and retirees. • Tesselaarsdal: Lifestyle living on smallholder farms. • Riviersonderend: Consolidation of existing settlements, with no new planned expansion of the residential base. • Rural hinterland: Rural and farm-based housing options to meet the needs of current and future residents and off-grid eco-estates.

2. Visitor Destination

Priority and Supportive Actions • Unite the eight towns under one umbrella and use this as a platform to market the region. • Establish TWK as THE premier mountain biking destination in South Africa and the Southern Hemisphere by building up its network of mountain biking trails and services. • Promote the region as a green living destination building on the success of the wine biodiversity route by introducing a voluntary tourism carbon offset programme. • Business retention e.g. The Caledon and casino • Expand tourism product offerings by focusing on developments on the dams using public land, developing Nuweberg and the development of new themed routes such as a cultural or wine route. • Establish TWK as THE capital of country food by developing a partnership with a global country food icon and using this to strengthen the region’s food offerings and profile. • Work with emerging businesses to ensure excellent service standards in the region and to assist them to package their products and to link these into the tourism market.

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Role of Each Town • Grabouw: Tourism gateway on Cape Town side, offering wedding venues, adventure tourism (especially mountain biking), farm accommodation and niche-market country hotel options including a new development on the Eikenhof Dam. Home to three farm stalls and excellent white wines. A training hub for tourism and hospitality. • Villiersdorp: Gateway from Franschhoek offering farm accommodation, water sports on the • Theewaterskloof dam and a development on the dam. It is also the start of the wine biodiversity route. • Genadendal: Heart of the cultural offering of the region. • Greyton : Safe country town offering the best of small town tourism, excellent country food and wedding venues and mountain biking. • Botriver : Green energy countryside offering farm accommodation, history and growing number of wine farms on a niche wine route. • Caledon: Home of the hot springs, offering sports tourism, conferencing facilities, the casino and the atmosphere of a working agricultural town. • Tesselaarsdal: Country getaway for nature and mountain bike lovers. • Riviersonderend: Unspoilt country offering the authentic country experience, hiking and a gateway to the region from the Garden Route.

3. Centre of Learning

Priority and Supportive Actions • Support ELF to develop its new campus and grow its training capacity and programmes, especially its artisan training and rural schools programmes. • As part of the effort to improve the quality of education in the region, work with the Historic School Project to revive Genadendal as a centre of learning. • Work with existing schools to expand the English medium school offerings in the region as a basis for expanding the resident base in the region. • Partner with a higher education institution to become a satellite site for innovation and sustainable living, building on the successes of the Grabouw Sustainable Community Initiative. • Build the region’s reputation as a location for excellent schools-based education including work with all the existing schools, ELF rural schools programme, Stellenbosch University schools development programme and the Department of Education to improve the quality of education offered in the region. • Partner with a town and region elsewhere in the world as part of supporting innovative governance and global connectivity.

Role of Each Town • Grabouw: Centre of school excellence and skills training focused on ELF. • Genadendal: Rebuild the historic educational role of the town as a centre of education and artisan training. • Caledon: Centre of municipal role model. • Greyton : Centre of English medium schooling. • All towns: To become a model of entrepreneurship training in schools, in partnership with the private sector and a role model for creative agricultural partnerships.

4. Vibrant Economy

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Priority and Supportive Actions • Partner with the local farming associations, the Department of Agriculture and Rural Development and DBSA rural development programme to develop innovative solutions to rural and peri-urban development and the current impasse around land reform. Build on the strategies of the War on Poverty and Integrated Rural Development approaches. • To make Theewaterskloof an attractive location to do business in by: o Developing investment guidelines, leveraging existing incentives and resources for businesses and collecting and packaging relevant information on the local economy; o Reducing red tape and facilitating fast approvals of plans and related regulatory applications; o Ensuring employment intermediation services. • This will provide a platform for expanding the economic base in the region. • Host an investors’ conference to showcase the region and its plans to potential investors. • Partner with farmers to address challenges facing the sector, such as water constraints and quality and fire management. • Allow for all farms to develop a complementary agri-tourism base as part of diversifying farm based income. • Develop a green brand for the region and industry- based programmes to support the brand as outlined in the next programme area • Capitalise on the Houwtech resource by partnering with investors interested in using the resource. • Ensure wireless broadband connectivity is available across the region increasing the area’s attractiveness as a place to live and do business. This will also support the objective of educational excellence/ web- based educational resources.

Role of Each Town • Grabouw: Diversified economy based on deciduous fruit and wine farmlands, agro-processing for these value chains, tourism, education and construction sectors • Villiersdorp: Agricultural economy linked to deciduous fruit and wine farmlands supported by a secondary agricultural centre and tourism • Genadendal: Cottage industry centre, education and tourism-based economy • Greyton : Hub for mobile entrepreneurs supported by tourism, education and services sector economic activities • Botriver : Wine region, renewable energy generation centre and light industrial hub for the region • Caledon: Services centre for the region for both the public and agricultural sectors complemented by tourism and construction • Tesselaarsdal: Centre of entrepreneurial innovation, tourism and farming (fynbos and essential oils with a hint of dry land farming) • Riviersonderend: An economy based on agriculture including agricultural research and tourism.

5. Low Carbon & Green Business

Priority and Supportive Actions • Establish TWK as a source of renewable energy production, especially wind energy. • Develop a programme that aligns all Municipal resource use with best practices, including developing policies and regulations that incentivise sustainable practices, retro-fitting all Council buildings and infrastructure to conserve use of energy and water and minimise waste, and developing green audit capacity.

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• Recognise that water is one of the region’s primary resources and improve water governance and management. • Educating all residents about sustainable living practices by developing a set of smart guides, working with ward committees and launching an ‘Off the Grid’ Festival to showcase green energy and energy management options in partnership with a funder. • Position TWK to become a pilot for the roll out of the new treasury green MIG programme • Conserve and expand the green belts in the region including a specific intervention around maximising the region’s location on the Kogelberg Biosphere and another to clean the Palmiet River from its source to increase the flow of water and improve water quality along the river. • Partner with local businesses to explore how firms can reduce their carbon footprints and develop industry-wide programmes for each of the main economic sectors – agriculture, agro-processing, tourism and construction. • Measure the carbon output of the region in partnership with a university. • Establish green information centres where people can collect recycling bags, CFC light bulbs, drop off old batteries, buy green electricity or plant a tree to offset their carbon use.

Role of Each Town • Grabouw: Model of sustainable living with ELF as a green campus which incorporates environmental aspects in all training programmes • Villiersdorp: Model of sustainable farming in partnership with the private sector • Genadendal: Model of responsible tourism • Greyton : Model of responsible tourism • Botriver : Centre of wind farming • Caledon: Model of resource-efficient wastewater through SAB and public-sector assets through the Municipality • Tesselaarsdal: Innovative energy use programmes linked to smallholder farming • Riviersonderend: Carbon-neutral town model

3.3 TWK Local Economic Development Strategy (LED) 2009

In order to meet its existing infrastructure backlogs and maintenance requirements, Theewaterskloof needs between R60 and R72 million in capital funding per annum for the next ten years. With the current rates base, this would incur a deficit of R50 million on the operating account by 2016. Initial modelling suggests the local economy would need to grow by at least 5% per annum for the Municipality to be in a position to service the loans and remain financially viable in 2016. This target is unlikely to be achieved given the global and national recessions. therefore, the Municipality needs to find ways to use its infrastructure demands to stimulate the local economy by drawing on National Government’s stimulus package. Therefore, the Theewaterskloof Municipality has prioritised LED and has captured its vision in the 2008 IDP as “Positioning and transforming the Theewaterskloof Municipality to be a competitive developmental local authority.”

Advantages of Area • Excellent climate • Fertile soil ideal for pome fruit and sauvignon blanc grapes • Top apple producing area in the country • Conservation asset base including Kogelberg Biosphere Reserve, Cape

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• Nature reserves and other conservancies • Theewaterskloof and Eikenhof dams • Hot springs • Proximity to Cape Town, Stellenbosch and Hermanus • Proximity to the N2 • Labour availability • Elgin’s growing brand • History of artisan skills • Presence of three FET training institutions– ELF, OTC and Boland College • Strong agricultural associations • Number and scale of value adding firms in the region • Existing tourism sector • Number of skilled business people (largely in the agricultural sector) who understand complex global markets and are able to innovate • Surrounded by growing economies • Relatively low crime • Relatively cheap land and services

Town-based Implementation of the Strategy

Grabouw In respect of agriculture , the focus in Grabouw will be on renewing the sector through replanting of old orchards combined with the development of an innovative financial scheme to finance this investment, to be developed in partnership with DBSA; a focus on farm worker housing solutions both on- and off-farm; and the development of a labour strategy that manages the seasonality of work, promotes the use of local labour and raises the profile of agriculture as a career amongst the youth.

The development of the Elgin tourism brand and product offerings was identified as a driver of growth in the Valley. Key interventions included the development of a facility on Eikenhof Dam, the development of the railway station, the development of a route and a market. Finally, the development of Grabouw as a centre for further education and skills training in selected trades was seen as another driver of growth.

Villiersdorp key challenge in the agricultural sector is addressing the housing needs of farm workers, in particular the provision of off-farm worker housing.

The second area focuses on developing tourism through developing and agreeing on a brand and positioning, building on the municipal-wide project and then working to promote this. Key issues to be addressed include signage, town entrances, the main road, the nature garden and the convening of an annual event. Within this new brand, the development of the Dam needs attention – through participating in the spatial plan and also using State land to broaden the offerings on the Dam.

Greyton The tourism focus will build on and strengthen the area’s existing brand and reputation. To distinguish Greyton and its neighbouring Genadendal from other areas, a focus on cultural tourism is proposed with plans to host music festivals, art shows and cultural history tours in the area.

Urban-Econ 2012© Spatial Economic Input 17 Theewaterskloof Municipality SDF

Linked to the tourism focus, residents identified the need to develop arts-based education across all the schools and to focus on hospitality training for school leavers. Greyton is attracting people who are looking for a relaxed but sophisticated lifestyle. It could become a Franschhoek but for one constraint: the lack of a good high school. Addressing this will unlock further economic growth.

Finally, the Municipality needs to focus on: • Storm water infrastructure to control localised flooding and Waste management - both an overarching strategy and the creation of infrastructure capacity.

Genadendal The allocation and management of Genadendal’s communal land remains a big issue and a constraint to growth. Therefore, the residents prioritised: • Finalising the land transformation programme and • Developing a small-holder farming programme.

Together, these will unlock the land value in the area. The second focus was on tourism linked to the Greyton focus on a cultural centre. Here the priority would be to develop Genadendal as a living museum and to increase product offerings (for example the existing school based drama and music focus and the potential for home stays).

In the past, Genadendal was regarded as one of the country’s premier sites of learning . While the school has continued to produce good results, it is a far cry from its historic reputation. Therefore, the human capital focus will be on restoring Genadendal’s status as a centre of learning, in particular learning in the performing arts. In addition, as with many of the other towns, the human capital focus will also include a focus on ECD.

Botrivier Botrivier is home to the oldest rail station outside of Cape Town. The focus of the tourism will, therefore, be on the rail links with Elgin, combined with a wagon and cycle route into Greyton. Once in the town, the offering would focus on agri-tourism products such as wine-tasting and fruit picking.

Botrivier has major industrial development potential as outlined in the Botriver Growth study. The release of this land will unlock economic activity in the area and create opportunities for sustainability-type businesses.

Caledon The first focus will be on unlocking residential l and with a view to increasing resident volumes and stemming the outflow of capital from the area. Renewing the agricultural sector through creative financial schemes will be a key priority along with addressing farm worker housing.

The third focus area will be on unlocking tourism by improving the gateways, developing the town centre and the road link to Overstrand and, lastly, increasing the product offerings – the new golf course, the flight park, a beer and bread festival and the rail link.

Riversonderend Developing alternative energy will be the focus of the Riversonderend LED programme, with plans to partner with the private sector to pilot a wind farm in the area.

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With tourism the consistent focus across all the areas, Riversonderend will also focus on branding, gateways and the development of new trails and routes.

3.4 THEEWATERSKLOOF GREEN ECONOMY

This policy is covered in the TWK Vision 2030 Strategy

3.5 THEEWATERSKLOOF STRATEGIC TOURISM STRATEGY

This policy is covered in the TWK Vision 2030 Strategy

3.6 SPATIAL IMPLICATION

In order to understand the spatial implications of the policy initiatives on the TWK spatial economy a review of the policies as discussed in the previous sub-sections was done and a table was formulated indicating the proposed project or initiative as well as classifying each policy initiative into a specific land use. The different land-uses pertain to the following:

• Residential (this includes retirement developments) • Industrial • Office • Hotel/Accommodation/Conferencing • Tourism • Institutional • Retail

The following Table 3.1 provides the summary of the proposed projects and the economic potential for each project.

TABLE 3.1: TWK PROJECT LAND-USE CLASSIFICATION SUMMARY Proposed TWK LM Project Project Source Economic Potential GRABOUW • Development of RDP Housing 1. Increase in direct spending in for indigent households the Construction sector • Development of Farm Worker Theewaterskloof Vision 2030 (A 2. In-direct spending on the Housing desirable Place to Live) manufacturing sector for the & Theewaterskloof LED 2009 required building materials. 3. Job opportunities during the construction phase • Development of Gap Housing 1. Increase in direct spending in for working class families the Construction sector Theewaterskloof Vision 2030 (A 2. In-direct spending on the desirable Place to Live) manufacturing sector for the required building materials. 3. Increase in building rates and

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Proposed TWK LM Project Project Source Economic Potential taxes 4. Employment opportunities during the construction and operational phase • Development of middle income 1. Increase in direct spending in cluster housing the Construction sector 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and taxes 4. Employment opportunities during the construction and operational phase • Development of ‘Off-Grid 1. Increase in direct spending in Estates’ on surrounding the Construction sector farmlands 2. In-direct spending on the manufacturing sector for the required building materials. Theewaterskloof Vision 2030 (A 3. Increase in building rates and desirable Place to Live) taxes 4. Employment opportunities during the construction and operational phase 5. Attract investment • Development of Wedding 1. Increase in direct spending in Venues the Construction sector 2. In-direct spending on the manufacturing sector for the required building materials. Theewaterskloof Vision 2030 3. Increase in building rates and (Visitor Destination) taxes 4. Employment opportunities during the construction and operational phase 5. Attract more tourists and increase tourism expenditure • Development of Mountain bike Theewaterskloof Vision 2030 1. Increase in tourism expenditure trails (Visitor Destination) • Niche market Hotel 1. Increase in investment Development 2. Increased spending in the Theewaterskloof Vision 2030 construction sector (Visitor Destination) 3. Job creation 4. Increased spending on tourism

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Proposed TWK LM Project Project Source Economic Potential accommodation • Tourism facility development 1. Increase in investment of the Eikenhof Dam 2. Increased spending in the Theewaterskloof Vision 2030 construction sector (Visitor Destination) 3. Job creation & Theewaterskloof LED 2009 4. Increased spending on tourism activities • Training Hub for Tourism and 1. Attract investment for tertiary Hospitality training 2. Attract students who will Theewaterskloof Vision 2030 increase spending on (Visitor Destination) educational accommodation and living expenses 3. Job opportunities in the education sub-sector • Development of a training 1. Impact on construction sector facility focusing on ELF. 2. Attract investment for tertiary training Theewaterskloof Vision 2030 3. Attract students who will (Centre of Learning & Low Carbon increase spending on and Green Business) educational accommodation & Theewaterskloof LED 2009 and living expenses 4. Job opportunities in the education sub-sector • Focus on the development of Theewaterskloof Vision 2030 1. Increased spending in the agro- agriculture in the form of (Vibrant Economy) processing sector deciduous fruit and wine & Theewaterskloof LED 2009 2. Job creation • Development of innovative 1. Increased investment into the financial schemes to finance Theewaterskloof LED 2009 agriculture sector the investment into agriculture 2. Job creation • Development of a Labour Strategy to manage seasonal 1. Job opportunities Theewaterskloof LED 2009 workers and use of local 2. Household Income labours • Development of the Elgin 1. Attract tourists to increase their Tourism Brand Theewaterskloof LED 2009 expenditure 2. Job opportunities • Development of a railways 1. Infrastructure investment station and a route and a 2. Impact on construction and market Theewaterskloof LED 2009 transport sector 3. Job creation 4. Impact on retail sector VILLIERSDORP • Development of high income Theewaterskloof Vision 2030 (A 1. Increase in direct spending in

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Proposed TWK LM Project Project Source Economic Potential housing options around the desirable Place to Live) the Construction sector Theewaterskloof Dam 2. In-direct spending on the manufacturing sector for the required building materials. 3. Increase in building rates and taxes 4. Employment opportunities during the construction and operational phase • Development of Farm Theewaterskloof Vision 2030 1. Increase in investment Accommodation (Visitor Destination 2. Increased spending in the & Theewaterskloof LED 2009 construction sector 3. Job creation 4. Increased spending on tourism accommodation • Water sports on the Theewaterskloof Vision 2030 1. Increase in tourism expenditure Theewaterskloof Dam (Visitor Destination) 2. Job creation • Tourism Development of the Theewaterskloof Vision 2030 1. Increase in investment Theewaterskloof Dam (Visitor Destination) 2. Increased spending in the construction sector 3. Job creation 4. Increased spending on tourism accommodation • Start of the Wine Biodiversity Theewaterskloof Vision 2030 1. Increased tourism expenditure Route (Visitor Destination) 2. Impact on retail sector • Agricultural developments 1. Investment into agricultural focused on deciduous fruit and Theewaterskloof Vision 2030 sector wine (Vibrant Economy) 2. Investment into manufacturing sector • Tourism Brand Positioning , 1. Attract more tourist signage and nature garden Theewaterskloof LED 2009 2. Increase tourism expenditure development • Annual Tourism Event 1. Attract more tourist Theewaterskloof LED 2009 2. Increase tourism expenditure GENADENDAL • Development of education 1. Impact on construction sector facilities focusing on artisan Theewaterskloof Vision 2030 2. Impact on retail and training (Centre of Learning) accommodation sector 3. Job opportunities • Development of small-holding 1. Impact on agricultural sector Theewaterskloof LED 2009 agricultural programmes 2. Impact on job creation • Develop the town as a living 1. Attract more tourists to museum and an increased Theewaterskloof LED 2009 increase their tourism product offering expenditure

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Proposed TWK LM Project Project Source Economic Potential • Development of education 1. Impact on construction sector facilities focusing on the 2. Impact on retail and Theewaterskloof LED 2009 performing arts accommodation sector 3. Job opportunities GRAYTON • Development of Country Living 1. Increase in direct spending in housing options the Construction sector 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and taxes 4. Employment opportunities during the construction and operational phase • Development of existing tourism base such as wedding 1. Impact on construction sector venues and mountain bike Theewaterskloof Vision 2030 2. Increase in tourism products to trails (Visitor Destination) increase tourism expenditure • Focus on cultural tourism such & Theewaterskloof LED 2009 3. Job opportunities as music festivals, art shows and historical tours in town • Development of education 1. Impact on construction sector facilities focusing of English Theewaterskloof Vision 2030 2. Impact on retail and Medium Schooling (Centre of Learning) accommodation sector • Development of art-based 3. Job opportunities training facilities BOTRIVIER • Development of residential 1. Increase in direct spending in units on small holder farms the Construction sector 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and taxes 4. Employment opportunities during the construction and operational phase • Development of retirement 1. Increase in direct spending in units the Construction sector Theewaterskloof Vision 2030 2. In-direct spending on the (Visitor Destination) manufacturing sector for the required building materials. 3. Increase in building rates and

Urban-Econ 2012© Spatial Economic Input 23 Theewaterskloof Municipality SDF

Proposed TWK LM Project Project Source Economic Potential taxes 4. Employment opportunities during the construction and operational phase • Development of Farm 1. Increase spending on the Accommodation construction sector Theewaterskloof Vision 2030 2. Increase tourism expenditure in (Visitor Destination) the accommodation sector 3. Job creation • Development of a niche market Theewaterskloof Vision 2030 1. Job creation wine route (Visitor Destination) 2. Increased tourism expenditure • Development of renewable 1. Investment into the energy centre such as wind manufacturing sector Theewaterskloof Vision 2030 farming 2. Investment into the green (Vibrant Economy) technology 3. Job creation • Development of a light Theewaterskloof Vision 2030 industrial hub (Vibrant Economy & Low Carbon 1. Impact on construction sector and Green Business) 2. Impact on manufacturing sector & Theewaterskloof LED 2009

• Development of rail links with 1. Impact on transport sector Elgin as well as a wagon and Theewaterskloof LED 2009 2. Increase tourism expenditure cycle route to Greyton 3. Job creation CALEDON • Development of high and 1. Increase in direct spending in middle income housing units the Construction sector 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and & Theewaterskloof LED 2009 taxes 4. Employment opportunities during the construction and operational phase • Development of Retirement 1. Increase in direct spending in units the Construction sector 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and taxes 4. Employment opportunities during the construction and

Urban-Econ 2012© Spatial Economic Input 24 Theewaterskloof Municipality SDF

Proposed TWK LM Project Project Source Economic Potential operational phase • Development of sports tourism Theewaterskloof Vision 2030 1. Increased tourism expenditure (Visitor Destination) 2. Job creation • Development of conferencing 1. Impact on construction sector facilities 2. Job creation Theewaterskloof Vision 2030 3. Impact on business tourist (Visitor Destination) expenditure 4. Attract investment • Development of offices for Theewaterskloof Vision 2030 1. Impact on construction sector municipal and agricultural (Centre of Learning & Vibrant 2. Temporary construction job services as well as tourism and Economy) creation construction • Develop farm worker housing 1. Impact on construction sector 2. Job creation Theewaterskloof LED 2009 3. Indirect impact on new business sales • Development of innovative 1. Increased investment into financial schemes to finance Theewaterskloof LED 2009 agricultural sector the investment into agriculture 2. Job creation • Tourism development through 1. Attract more tourists to improving the town’s gateways Theewaterskloof LED 2009 increase tourism expenditure 2. Spending in construction sector • Improving tourism product 1. Construction sector impact offerings such as a new golf 2. Increased business activities course, a flight park and a 3. Job creation Theewaterskloof LED 2009 bread festival 4. Investment into infrastructure 5. Skills development 6. Attract more sport tourists TESSELAARSDAL • Development of Lifestyle Living 1. Increase in direct spending in Residential units on small the Construction sector holder farms 2. In-direct spending on the manufacturing sector for the Theewaterskloof Vision 2030 (A required building materials. desirable Place to Live) 3. Increase in building rates and taxes 4. Employment opportunities during the construction and operational phase • Development of nature based tourism offerings such as Theewaterskloof Vision 2030 mountain bike trails (Visitor Destination) 1. Increase in tourism expenditure

Urban-Econ 2012© Spatial Economic Input 25 Theewaterskloof Municipality SDF

Proposed TWK LM Project Project Source Economic Potential RIVIERSONDEREND • Nature based tourism offering s Theewaterskloof Vision 2030 such as hiking (Visitor Destination) 1. Increase in tourism expenditure & Theewaterskloof LED 2009 • Development of renewable 1. Impact on construction sector energy centre such as wind Theewaterskloof Vision 2030 2. Impact on manufacturing sector farming (Vibrant Economy) 3. Impact on utilities sector 4. Job creation

According to Table 3.1 the various policies have resulted in capturing the economic, social and environmental in the form of different initiatives which will impact the spatial context of the study area if and when these projects are implemented. It is the purpose of this report to determine what the current economic space demand is for the various land uses for the TWK local municipal economy as well as to determine what the future growth for the area could be if the policy provided is implemented. Table 3.1 has indicated the proposed locations for the various projects according to the policies.

In order to determine the economic impact of the proposed policy interventions assumptions have been made regarding the economic potential as described in the following sub-section.

3.7 ECONOMIC IMPACT

The various property markets will be impacted by the proposed interventions such as the planned additional RDP and GAP houses as well as other initiatives such as the agro-processing and light industrial parks etc. To quantify these impacts Urban-Econ utilised industry standards and relied heavily on previous project input costs of similar interventions in an attempt to quantify the extent of the planned project to quantify the economic impact and thus what the implication would be regarding increase in demand for specific land uses.

In order to quantify the economic impact of the investments, the Input Output (I/O) matrix for the Western Cape Province was used. A I/O model is a comprehensive, economy-wide database that contains information about the flow of resources that takes place between the different economic agents within an economy between the different sector. Using the I/O model methodology, various anticipated direct and indirect economic impacts of the TWK policy interventions have been quantified. These economic impacts have been derived using an understanding of economic cause-effect relationships.

The principle of cause-effect is that for any economic action, there can be a multitude of different economic reactions (effects). For the purposes of this project, the main cause/action is the implementation of the various projects proposed in the policy documents as summarised in Table 3.1 . This then results in a number of direct potential/probable effects, which also have a range of indirect potential/probable effects. The natures of the probable economic cause-effects that will result from the policy interventions are illustrated in Figure 3.1.

Urban-Econ 2012© Spatial Economic Input 26 Theewaterskloof Municipality SDF

FIGURE 3.1: CAUSE-EFFECT RELATIONSHIPS RESULTING FROM THE PROPOSED TWK POLICY INTERVENTIONS

The economic cause-effect relationships resulting from the TWK policies are described according to points 1 to 4 below:

1) The investment related to the TWK policies interventions results in the stimulation of: 2a) Construction spending involved in the development 2b) The creation of operational income in the form of government revenue (e.g. rates and taxes) 3a-b) The stimulation of these economic activities will result in various direct and indirect economic impacts (as described in 4.4 above) 4) These direct and indirect economic impacts will result in economic structural changes in the regional economies

3.7.1 QUANTIFYING ECONOMIC IMPACT

The subsequent paragraphs discuss the direct, indirect and induced impacts of the construction phase of the planned TWK policy interventions. The findings of the I/O modelling within subsequent paragraphs, propose to illustrate the impact that this capital injection will have on the local economy and regional economies of the study area.

The various interventions will have a range of impacts. This will relate to capital expenditure and operational expenditure. A capital injection (CAPEX) will be projected for each of the development activities. These include direct and indirect economic impacts. The construction of the various proposed policy interventions will have the following estimated impacts on the economy in the study area:

Additional new business sales


Additional GGP

Urban-Econ 2012© Spatial Economic Input 27 Theewaterskloof Municipality SDF

Additional employment (direct and indirect)

The total capital investment which will be made by the developer during the construction phase is based on estimates of the size of the facilities for example residential units and average building costs etc. for different developments. Urban-Econ used industry averages to simulate a “typical” economic impact as the interventions have not been quantified and are still in a concept form therefore no financial information is available. The construction phase of the various interventions is estimated to be over a period of a ten year period. Therefore the economic impact calculated for the construction phase is based on an annual impact but is not permanent.

It is generally known that after the construction of a development or facility, on-going economic impacts (expenditure and output) will be experienced following the commencement of the economic activities on site. This expenditure expands the markets for goods and services, increases the labour market and services as impetus for new commercial development. This relates to the operation expenditure (OPEX) phase of any intervention.

The economic impact is determined by the level of economic activity generated because of the increase in market demand in effected sectors. It is estimated that the proposed TWK policy interventions will generate this demand over a certain number of years. The demand will be operational and direct, indirect and induced, this report will once again use a simulated impact model based on industry averages for the OPEX as inputs into the I/O model due to the lack of financial information available. The on-going impacts can be measured according to new business output in the area (turnover), additional people employed and the resulting increase in GGP contribution. The impact calculated will indicate the potential economic effect that on-going, sustained economic activity in the study area can have on the total economy.

The following Table 3.2 represents the total impacts for both the construction and operational phase of the different proposed policy interventions for the various proposed land uses.

TABLE 3.2: TOTAL ECONOMIC IMPACT (CAPEX) ECONOMIC ACTIVITY DESCRIPTION CAPEX 1. Ranging from low to high density in 1. The impact on the construction the various towns there are 15 859 sector is estimated to be R 8 units proposed for the next 10 years. billion taking in account an Residential Units Using the average unit per ha ration average building cost of R 5 500 for the different densities to per m² and an average size of a determine the total capital 100 m² per unit. expenditure. 1. Developing a retirement The retirement facility in Caledon is development and not an old age estimated to cost R 49 000 000 for Retirement Units home of approximately 196 unit the 196 units and R24 500 000 for development in Caledon and a 98 the 98 units in Botrivier. This does unit development in Botrivier. not include land costs etc. 1. Hotel venue (100 beds) 1. The capital expenditure for a 2. Eikenhof Dam chalets (20 units) hotel will be R 10 000 000. Short-stay Accommodation 3. Farm Accommodation (8 additional 2. The Eikenhof Dam chalets will Facilities beds per farm using an existing be approximately 35 m² in size structure) and will cost R 560 000 to

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ECONOMIC ACTIVITY DESCRIPTION CAPEX construct. 3. The farm accommodation will utilise existing farm residential houses were possible. 1. The wedding venue’s estimated to 1. The total capital expenditure be 400 m² and will include a for constructing a wedding and conferencing facility. conferencing venue will be R 2 2. The clubhouse planned at the 500 000. Eikenhof dam facility for 2. The clubhouse is estimated to recreational use is estimated to be cost R 1 625 000 to construct. 250 m². 3. It is estimated that each tourist 3. The railway station revitalisation spends approximately R650 per could potentially result in an day of which R250 is on non- additional 4 800 tourist visiting such durable goods. This would be a activity and it is estimated that an injection into the retail 20% of there tourists will result in sector. additional bed nights and additional 4. The wine route is estimated to tourism expenditure. attract 4680 tourists per annum 4. A wine biodiversity route will result of which 40% will be new in wine farms in the area receiving tourists therefore creating an more visitors who spend additional additional tourism expenditure money on wine. of R250 on non-durable goods 5. A niche wine route proposed would such as wine purchases as well Tourism Facilities and be similar to the wine route in as demanding additional bed activities Grabouw just on a smaller scale due nights at short-stay to the fact that less wine cellars will accommodation facilities. be included in the route. This will 5. The niche wine route is therefore attract a smaller number estimated to attract 1170 of tourists. visitors per annum of which 6. An annual tourism even creates a 40% will be new tourists large amount of interest for example therefore creating an additional a wine festival or a food festival. It is tourism expenditure of R250 on estimated that such a festival will non-durable goods such as wine result in an additional 20 000 purchases as well as demanding tourists to the area. additional bed nights at short- 7. Mountain bike and hiking routes will stay accommodation facilities. not attract additional tourists to the 6. The additional tourists taking area but will rather result in tourists part in the festival will impact visiting the area to take part in on tourism expenditure (R250) another activity. and short-stay accommodation 8. A cultural tourism even is estimated of at least 2 nights per visitor. to result in an additional 15 000 new 7. The hiking and mountain biking tourists visiting the area. will create no new tourism 9. A new 18 hole golf course expenditure accept if the

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ECONOMIC ACTIVITY DESCRIPTION CAPEX development is used as an an activity requires a guide or a example. entrance fee etc. 8. The cultural tourism even will result in an estimated 2 additional bed nights per tourists as well as an additional tourism expenditure of R250 per tourist per day. 9. The golf course is estimated to cost R 51 000 000 to construct. 1. At the Eikenhof Dam a boutique 1. The capital expenditure for the retail facility linked to the clubhouse retail development will be Retail facilities will be developed at an estimated R 520 000 to construct without size of 260 m² which will be enough any fittings in the shops. space for 4 shops. 1. Wind Farm developments includes 1. The capital expenditure for an expenditure on construction works average wind farm is estimated (i.e. infrastructure, buildings), Plant to be R 1 268 547 000. Renewable Energy and machinery, Electronic equipment, Transport equipment, Cost of Land etc. 1. The light industrial hub or park 1. The total estimated capital would potentially consist out of investment which will be made • Offices by the developer during the Industrial Hub • Training Centers construction phase of a • Retail & Showrooms industrial hub would be a sum • Manufacturing space total of R 23 667 600. • Warehousing space 1. The training Hub facility will be 1. The training hub will cost approximately 4095 m² in size. approximately R 18 427 500 to construct. 2. A training facility focusing on ELF 2. The training facility and the and the performing Arts academy performing arts academy will Educational/Institutional will be approximately 800 m² in size. each cost an estimated R 3 3. An additional educational facility 600 000 to construct. such as a school will be similar in 3. An additional educational size and cost to the ELF training facility such as a school will be facility. similar in size and cost to the ELF training facility. Commercial and Office Space 1. The relocation of the municipal and 1. The new office space is agricultural services office is estimated to cost R 18 000 000 estimated to result in a demand for to construct. 1850 m² of office space.

Urban-Econ 2012© Spatial Economic Input 30 Theewaterskloof Municipality SDF

3.7.2 ECONOMIC IMPACT MODELLING

The subsequent Table 3.3 discuss the direct, indirect and induced impacts of the construction and operational phase of the proposed policy interventions. The findings of the I/O modelling within subsequent paragraphs, propose to illustrate the impact that this capital injection as quantified in Section 3.7.1 will have on the local economy and regional economies of the TWK municipal area. The impacts relating to the investments in the economy will be split in a construction phase as well as a operational phase. The assumption regarding the impacts relates to a 10 year for construction and operational phases, therefore the impacts have been phased and when used in the following section a average annual injection has been determined.

TABLE 3.3: ESTIMATED ECONOMIC IMPACT OF TWK POLICY INTERVENTIONS Development Activity Total Additional New Total Additional Total Additional New Business Sales (R’000) GGP(R’000) Job Opportunities CONSTRUCTION PHASE Total 28 020 079 5 137 693 77 627 OPERATIONAL PHASE Total 364 020 104 881 8 296 (Source: Urban-Econ I/O model, 2012)

The above figure indicates that if the policy interventions take place they will result in a huge economic injection for the TWK economy. These projections will be used in the following section to determine the impact on the space needed to accommodate the potential growth which could occur assuming that there will be a 40% leakage of new business sales, growth in the economy and jobs outside the local economy. A 40% leakage has been allowed due to the assumption that not all goods and services will be purchased in the TWK borders and will need to be sourced outside the TWK borders and therefore a realistic expenditure leakage has been utilised in the models.

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Section 4 : Space Demand Analysis

4.1 INTRODUCTION

The aim of the following section is to determine whether there would be a demand for specific types of land uses in the future in TWK and if so, to determine the amount space that is required to unlock economic opportunities. This can be determined by taking into account GGP, employment and output per worker as well as latent economic opportunities. In other words, the modelling determines the total net land demand for TWK by the year 2021.

4.2 MODELING APPROACH

Different in-house space demand models have been utilised to determine the potential demand for specific land- uses in TWK. These models take cognisance of the historic economic and projected growth trends (based on policies such as the 2030 vision) of the different economic sectors within a local economy and then translates this projected growth into the demand for space. The space demand models were developed for the following land uses:

1) Residential Market 2) Retail Market 3) Industrial Market 4) Office Market 5) Retirement Market 6) Short-stay Accommodation Market 7) Institutional/Educational Market

The following sub-section will present the results of each of these models for TWK.

4.2.1 RESIDENTIAL MARKET DEMAND ANALYSIS

This sub-section provides the high level market demand analysis results of the residential market and determines the demand for residential units in the whole of the TWK LM. From an economic point of view, the development potential of the market area (TWK LM) is influenced by a combination of factors in the market, including site size and locality, surrounding land use, emerging development dynamics, the rate of the population growth in the market, the income profile of the consumer market and housing preferences within the market.

4.2.1.1 DEMAND ANALYSIS

The demand analysis is based on a number of factors influencing the demand for housing units and including, inter alia, the following:

 The household growth rate  The household income levels

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 The growth in the Consumer Price Index (CPI)  The location of proposed residential development  The attraction of the proposed residential development  The level of investment confidence in the particular area  The interest/bonds rates for financing purposes

The first step in calculating the demand for residential units in the TWK LM is to determine the current and future total number of households in this region. The current (2011) total households within the area amount to 21,452. This figure is projected up until 2021 based on the average annual historical population growth rate in the LM (1.7%). Table 4.1 indicates the projected number of households for 2011, 2016 and 2021.

TABLE 4.1: NUMBER OF HOUSEHOLDS Number of Households 2011 2016 2021 TWK LM 21,452 23,043 24,758 (Source: Quantec Data based on Urban-Econ Calculations, 2011)

The demand for residential units is divided according to the distribution in terms the various household income levels (HIL), the HIL were changed from the standard 2001 classifications by taking inflation into account and projecting the different income categories by annual inflation rates from 2001 onwards to determine the standard 2011 HIL. For the purposes of this study, HIL 1 to 12 were used to calculate demand.

This will thus include living units catering for low income earning households through to young professionals or start-up families and up to more high-end housing facilities. Table 4.2 indicates the different HIL as well as the corresponding income categories and income group classifications per HIL which will be used in the model.

TABLE 4.2: HOUSEHOLD INCOME LEVELS (2011) HIL Income Category Income Group Level 1 No income Lower Low Level 2 R1 - R8 488 Lower Low Level 3 R8 489 - R16 976 Middle Low Level 4 R16 977 - R33 952 Middle Low Level 5 R33 953 - R67 903 Higher Low Level 6 R67 603 - R135 806 Lower Middle Level 7 R135 807 - R271 613 Middle Middle Level 8 R271 614 - R543 225 Higher Middle Level 9 R543 226 - R1 086 451 lower high Level 10 R1 086 452 - R2 172 901 Lower high Level 11 R2 164 179 - R4 328 356 Middle High Level 12 R4 328 357 or more Higher High

Table 4.3 indicates the demand for residential units in the TWK LM. An injection into the demand for residential units is included in the model as an assumption of the total number of job opportunities created by the policy interventions will create an impact on in migration into the area by job seekers. It is assumed that approximately

Urban-Econ 2012© Spatial Economic Input 33 Theewaterskloof Municipality SDF

10% of all job opportunities created will result in a household relocating to the TWK area. It is assumed that the total job opportunities will occur over a 10 year period. The total injection of 859 additional in migrants will be phased into the number of households over a 10 year period. This injection has been added into the total number of households in the residential model.

TABLE 4.3: RESIDENTIAL DEMAND HIL 2011 2016 2021

Level 1 2 262 2 530 2 719 Level 2 836 935 1 005 Level 3 Low Income 3 353 3 752 4 031 Level 4 4 331 4 845 5 206 Level 5 4 786 5 354 5 753 Level 6 2 752 3 079 3 308 Level 7 Middle Income 1 547 1 731 1 859 Level 8 555 621 668 Level 9 140 157 168 Level 10 42 47 51 High Income Level 11 46 51 55 Level 12 20 22 23 TOTAL 20 668 23 125 24 846 (Source: Urban-Econ Residential Model, 2012)

Table 4.3 illustrates that the current demand (2011) for residential units in the TWK LM amounts to 20,668 units. It is evident that the demand for low cost and GAP housing is the highest with the low income residential demand in 2011 being 15,567 units and the middle HIL demand being 4,854 units in 2011. It is projected that this total residential demand will increase to approximately 24,846 residential units over the next 10 years (2021).

Table 4.4 below shows the net effective demand for residential property in the TWK LM. The net effective demand for residential property is calculated by taking the total demand for property (refer to Table 4.3 ) subtracted by the total supply of residential property as per the municipal valuation rolls.

TABLE 4.4: NET EFFECTIVE DEMAND FOR RESIDENTIAL PROPERTY, TWK LM, 2011-2021 Net Effective Year HIL Total Demand Total Supply Demand 2011 Low 15 ,567 916 + 14,651 Middle 4,854 8,471 -3,617 High 248 4,208 -3,960 2016 Low 17 ,417 916 +16,501 Middle 5,431 8,471 -3,040 High 277 4,208 -3,931 2021 Low 18 ,713 916 +17,797 Middle 5,835 8,471 -2,636

Urban-Econ 2012© Spatial Economic Input 34 Theewaterskloof Municipality SDF

Net Effective Year HIL Total Demand Total Supply Demand High 298 4,208 -3,910 (Source: Urban-Econ Residential Model, 2012)

Table 4.4 above shows that in the majority of residential units are demanded by the low income households where there is the smallest supply of 916 units according to the valuation roles. This supply is smaller due to the average house price in the TWK area being much more affordable than in Cape Town and therefore middle and high income residential units supplied in the study area have a municipal valuation of a lower market value thus resulting in a smaller supply of high income units. There is currently a higher demand than supply of middle and high income residential units due to this trend therefore the future residential zoning needs to be focused at high density low income and GAP residential units.

4.2.1.2 IMPLICATION

This shows a demand for residential property in the municipal area encouraging residential developments in the TWK LM. This will have positive economic and spatial implications, as majority of smaller municipality’s emphasised available space for housing within the SDF (refer to table 3.2 ). Considerations regarding the type and size of residential developments must align with the projected net effective demand for to ensure effective use of space earmarked for residential use within the individual municipalities that make up the TWK LM.

4.2.2 INDUSTRIAL MARKET DEMAND ANALYSIS

The purpose of this sub section is to determine whether there is demand for industrial space within the study area. The industrial market is a unique property market with various factors which influence the industry.

The industrial property market refers to space and buildings for all manufacturing activities, ranging from larger export industries to small manufacturing concerns. Manufacturing activities can be located in the following three types of developments:

An Industrial Hive: An industrial hive is designed as a SMME incubator facility. This could include a grouping of several buildings within an enclosed area, as well as a building consisting of several levels (floors) occupied by different companies. The main purpose of hives is to capacitate small businesses to enable them to enter the market place and remain competitive. In light of the above, periods of stay are limited. Business, technical and other support services are usually provided for small businesses. Public or private small business organisations generally manage hives (Urban-Econ; 1999) and (Western Cape Services Regional Council; 1993).
A Local Industrial Park (LIP): A LIP can be described as an industrial site, which has been subdivided into smaller units than are normally found in traditional industrial areas. These units are geared towards existing small businesses in accessible areas. An LIP is centrally managed and maintained and in some instances business support services, are provided. In general, small businesses may stay for unlimited periods within LIPs. Some of these LIPs are also known as prestige developments, which are more upmarket areas, with more sophisticated images, which include landscaping and relatively low building densities. For example Stellenbosch Techno Park (Urban-Econ; 1999).
Traditional Industrial Development: Traditional industrial developments constitute the largest number of industrial areas in the country and typically involve stands from approximately 2 000m² to a couple of

Urban-Econ 2012© Spatial Economic Input 35 Theewaterskloof Municipality SDF

hectares. Generally these types of developments are situated in the traditionally zoned industrial areas of towns and cities.

4.2.2.1 DEMAND ANALYSIS

The demand for industrial space is a function of the economic growth and business confidence and relies on a number of factors, including:

 The GGP and number of manufacturing concerns per industrial sector/ activity,  The output of each industrial sector,  The number of employees per industrial sector,  The growth percentage of each industrial sector.

The manufacturing sector consists of various activities which can be classified according to the Standard Industrial Classification of all economic activities (SIC). The eleven activities and subsequent SIC numbers are identified below:

1. Food and Beverages (SIC 30) 2. Textiles and Clothing (SIC 31) 3. Leather and Footwear (SIC 316 & 317) 4. Wood and Paper, including printing and publishing (SIC 32) 5. Chemical, Petroleum and Pharmaceutical Products (SIC 33) 6. Non-metallic Mineral Products (SIC 34) 7. Basic Metals (SIC 35) 8. Machinery (non-electric) (SIC 35) 9. Electrical Machinery and Products (SIC 36) 10. Transport Equipment (SIC 38) 11. Furniture (SIC 39)

In terms of the manufacturing sector’s sub-categories, Table 4.5 indicates the approximate number of employees and the employment growth rates per manufacturing subsector.

TABLE 4.5: FORMAL EMPLOYEES, MANUFACTURING SUB-SECTORS, TWK LM, 2011 Future Future Number of Growth Injection per Injection Industrial Category Percentage Employees Rate* annum per annum (CAPEX) (OPEX) Food, beverages and tobacco 704 34.1% 1.0% 5 8 Textiles, clothing and leather goods 80 3.9% -2.7% 9 3 Wood and paper; publishing and printing 242 11.7% -0.9% 18 4 Petroleum products, chemicals, rubber and 142 6.9% 2.7% 22 6 plastic Other non-metal mineral products 226 11.0% -0.7% 31 1 Metals, metal products, machinery and 396 19.2% 3.5% 20 1 equipment

Urban-Econ 2012© Spatial Economic Input 36 Theewaterskloof Municipality SDF

Future Future Number of Growth Injection per Injection Industrial Category Percentage Employees Rate* annum per annum (CAPEX) (OPEX) Electrical machinery and apparatus 15 0.7% 1.1% 15 1 Radio, TV, instruments, watches and clocks - 0.0% 0.0% 1 0 Transport equipment 104 5.0% -0.5% 101 22 Furniture and other manufacturing 156 7.6% 0.9% 2 1 Total 2,066 100% 0.4% 224 47 (Source: Urban-Econ calculations based on Quantec Research Database) *Calculated between 2001 and 2011 (10 consecutive years)

It is evident that of the approximately 2,066 formal employees in the manufacturing sector, 34.1% are working in the food and beverages category, while 19% is working in the metals and metals products category. The textiles and clothing sub-category however indicated the largest negative employment growth rate (-2.7%) during 2001 to 2010. The highest employment growth rate was experienced in the other petroleum products (2.7%). The TWK LM’s average annual growth in employment in the manufacturing sectors for 2011 was recorded at 0.4%.

Urban-Econ’s industrial demand model takes various factors such as employment, GGP growth rate, demand space parameters and expected growth forecasts into account in order to derive the expected demand for industrial space. To determine the effective demand of industrial space an industrial parameter was applied to the number of workers employed in the industrial sector. The industrial parameter therefore relates the demand for floor space per worker. Table 4.6 provides the industrial parameters applied in the Industrial Demand Model for the purpose of this study.

TABLE 4.6: EMPLOYMENT PARAMETER, INDUSTRIAL DEMAND Employment Parameter Manufacturing Sub-Sectors m²/employee Food, beverages and tobacco 150 Textiles, clothing and leather goods 150 Wood and paper; publishing and printing 238 Petroleum products, chemicals, rubber and plastic 238 Other non-metal mineral products 238 Metals, metal products, machinery and equipment 238 Electrical machinery and apparatus 150 Radio, TV, instruments, watches and clocks 100 Transport equipment 238 Furniture and other manufacturing 150

(Source: Urban-Econ, 2012)

Following the application of the industrial parameter the effective demand for industrial floor space or gross leasable industrial area (GLA) was determined. Table 4.7 provides the effective demand for industrial floor space per category for 2011, 2016 and 2021. An injection into the industrial demand model was calculated based on the

Urban-Econ 2012© Spatial Economic Input 37 Theewaterskloof Municipality SDF policy interventions. The injection was calculated by multiplying the total number of jobs created as a result of the interventions by the percentage of jobs estimated to be in the manufacturing sub-sectors as estimated by the StatsSA Western Cape (2012) I/O tables. It is estimated that during the construction phase a total of 37.8% of all jobs will be created in the manufacturing sector and during the operational phase a total of 22.9% of all jobs will be in the manufacturing sub-sector. There percentages are distributed amongst each of the sub-sectors as indicated in the industrial category of Table 4.7 below. TABLE 4.7: EFFECTIVE DEMAND, INDUSTRIAL DEMAND, STUDY AREA, 2011- 2021 (m²) Industrial Category 2011 Injection 2016 Injection 2021 Injection Food, beverages and tobacco 1,015 0 16,023 4,251 25,493 4,251 Textiles, clothing and leather goods -340 0 6,494 5,762 10,044 5,762 Wood and paper; publishing and -513 0 23,529 18,387 37,305 18,387 printing Petroleum products, chemicals, 893 0 40,523 22,179 67,880 22,179 rubber and plastic Other non-metal mineral products -354 0 36,128 29,669 57,283 29,669 Metals, metal products, machinery 3,220 0 48,099 19,201 80,400 19,201 and equipment

Electrical machinery and apparatus 24 0 12,235 8,882 19,991 8,882

Radio, TV, instruments, watches and - 0 600 258 960 258 clocks Transport equipment -130 0 103,490 100,232 187,848 100,232 Furniture and other manufacturing 207 0 3,557 1,524 5,663 1,524 TOTAL (m²) 4,022 0 290,679 210,345 492,865 210,345 (Source: Urban-Econ Industrial Demand Model, 2012)

According to Table 4.7, the total demand for industrial facilities is approximately 4,022m² (2011). If the injection of the additional manufacturing jobs which will be created is taken into account the demand for serviced industrial floor space is expected to grow to 492,690m² by 2021 which is a very large increase especially in the transport equipment sub-sector.

Table 4.8 below shows the Net Effective Demand for Industrial space within the TWK LM, based on the total demand for industrial space (discussed above) and the total supply of industrial space (m 2) based the TWK LM valuation rolls for 2011.

TABLE 4.8: NET DEMAND FOR INDUSTRIAL SPACE, TWK LM, 2011-2021 Total Demand Total Supply Net Effective Demand Year m2 Ha m2 Ha m2 Ha 2011 4, 022 0.4 9, 162 0.9 -5, 140 -0.5 2016 501,024 50.1 9, 162 0.9 491,862 49.1 2021 703,210 70.3 9, 162 0.9 694,048 69.4 (Source: Urban-Econ Industrial Demand Model, 2012)

Urban-Econ 2012© Spatial Economic Input 38 Theewaterskloof Municipality SDF

Table 4.8 above shows that in 2011 there was sufficient land zoned for industrial activities the TWK LM to the extent of 5,140 m 2. Projections however show that in 2016 there will be a demand for an additional 49 ha of industrial land due to the increase in demand for manufacturing activities especially due to the injection in demand as a result of the increase in manufacturing job opportunities due to the policy interventions. This will increase to 69 ha by 2021 if no further land is zoned for this land use.

4.2.2.2 IMPLICATIONS

Based on the demand analysis there is a substantial net demand for industrial space in TWK that will be generated in the future (49ha in 2016 and 69ha in 2021). It is important to notice which sub-sectors are experiencing a negative growth thus requiring less space. Overall there is a very high growth in the space demanded for industrial land uses. This aligns with TWK LM, where a number of the individual municipalities have proposed an increase in land to be made available for light industrial use in order to make effective use of available and generate employment opportunities which are within walking distance (±1km) of residential areas.

4.2.3 COMMERCIAL MARKET DEMAND ANALYSIS

This section focuses on the commercial market, with the objective of estimating the development potential within the TWK LM. The commercial market is typically made-up of retail and office land use activities. Due to the TWK valuation role not distinguishing between retail and office with regards to the current supply data the commercial demand will firstly determine the retail and then the office demand for GLA and then add the demand for commercial space for both models to determine the total demand for commercial space which will then be subtracted from the commercial space supplied as determined by the valuation role to determine the net demand for commercial space in TWK.

4.2.3.1 OFFICE MARKET DEMAND ANALYSIS

This sub-section focuses on the office market, with the objective of estimating the development potential within the market area (TWK LM). The demand for office space is complex since it consists of a derived demand for many sectors, which in turn, is stimulated by a number of independent factors. Generally, the major demand sectors for office space include public administration, retailing and wholesaling, social and personal services (medical, social welfare, etc.), manufacturing and financial/business services. The demand for offices can be derived by applying generally accepted parameters, regarding required floor area per office worker in different economic sectors, to the estimated economically active population in the market area. These per capita parameters are indicated below in Table 4.9 .

TABLE 4.9: OFFICE DEMAND PARAMETERS TYPE OF DEVELOPMENT m2 PER EMPLOYEE

Agriculture hunting, forestry and fishing 15 Mining and quarrying 15 Manufacturing 15 Electricity, gas and water supply 16 Construction 15 Wholesale and retail trade 16

Urban-Econ 2012© Spatial Economic Input 39 Theewaterskloof Municipality SDF

TYPE OF DEVELOPMENT m2 PER EMPLOYEE

Transport, storage and communication 16 Financial, insurance, real estate and business service 18 Community, social and personal services (incl. govt) 15 (Source: Urban-Econ, 2012)

The resulting demand for office space in the primary market area is indicated in Table 4.10 . The office demand (m²) was calculated by taking the leakage factors into account for each category as not all the people residing in the TWK LM work in the area. The leakage factor is determined for each economic sector and is equal to 25% for each sector. An injection into the office space demand model is included based on the additional job opportunities which will be created as a result of the policy interventions. This was calculated using the I/O model. The total job opportunities during construction and the operational phases were multiplied by the sectoral ratio used to indicate of the total jobs how many are in the financial and services sector. This ratio was then applied to the total jobs and divided by 10 in terms of the project implementation phasing as the project are estimated to be over a 10 year period.

TABLE 4.10: OFFICE DEMAND (m2) Office Demand (m 2) 2011 2016 2021 Agriculture hunting, forestry and fishing 10,537 9,474 5,567 Mining and quarrying 31 31 32 Manufacturing 4,114 4,147 4,312 Electricity, gas and water supply 151 147 126 Construction 1,373 1,402 1,558 Wholesale and retail trade 11,296 11,135 10,363 Transport, storage and communication 1,085 1,049 886 Financial, insurance, real estate and business service 27,307 29,182 40,672 Community, social and personal services (incl. gov) 9,010 8,775 7,685 Sub Total 64,904 65,341 71,201 Injection 0 22,789 22,789 Total 64,904 89,963 96,069 (Source: Urban-Econ’s Office Demand Model, 2012)

It should be noted that the future demand (2016 and 2021) was determined by applying the average annual growth rate to the 2011 study area’s influenced population total. This average annual growth rate was determined by calculating the growth rate from 2001 to 2011 in the formal employees in the TWK LM, within each of the economic sectors. Apart from the total demand for office space from 2011 to 2021, it is evident that the demand for offices are higher in the services sectors (financial and business, general services and government services) than in the manufacturing or trade sectors. This aspect should be taken into consideration when the offices are developed within the TWK LM.

Urban-Econ 2012© Spatial Economic Input 40 Theewaterskloof Municipality SDF

4.2.3.2 RETAIL DEMAND ANALYSIS

The primary demand factors which were used in order to derive the total demand for retail trade facilities in the TWK LM are as follows:

Disposable household income
Expenditure profile
Leakages and injections
Trading densities

In determining the retail demand within the TWK LM, the total households as well as the total average household income of the study area was calculated. Growth factors were applied to 2001 Stats SA income figures, based on the Statistics South Africa’s Consumer Price Index (CPI) historical growth rate from 2001 to 2010. Table 4.11 illustrates the total number of households (HH) and their average household income for the study area (TWK LM).

TABLE 4.11: HOUSEHOLD NUMBERS & AVERAGE HOUSEHOLD INCOME Year TWK LM Number of HH Average Annual HH Income 2011 20,288 R 1,828,240,956 2016 22,020 R 1,984,248,108 2021 23,899 R 2,153,567,635 (Source: Urban-Econ’s Retail Model, 2011)

Apart from the above average annual household income within the TWK LM, the expenditure profile should also be taken into consideration for each of the relevant retail categories. Table 4.12 indicates the household expenditures as utilised for the demand calculations.

TABLE 4.12: RETAIL EXPENDITURE PATTERNS Retail Expenditure Category % of Expenditure Durable Goods (i.e. furniture & entertainment goods) 3.5% Semi-durable Goods (i.e. clothing, footwear, & 6.9% household textiles) Non-durable Goods (i.e. food, beverages & medical 31.7% products) Services (i.e. recreational & entertainment services) 19.1% Total Expenditure 61.1% (Source: Urban-Econ’s Retail Model 2011)

Although it is evident that households in the TWK LM spend approximately 61% of their disposable income on retail products and services, it should be taken into consideration that the study area is an open economic system with linkages to surrounding economies, representing interaction across boundaries. This translates into leakages and injections out of or into the study area.

Urban-Econ 2012© Spatial Economic Input 41 Theewaterskloof Municipality SDF

Table 4.13 represents the leakages used in the model to take into account the outflow of purchasing power within the primary study area, where households residing in the primary study area purchase goods outside of their study area (TWK LM) due to them travelling, or purchasing goods and services which are not available in the area but are sourced elsewhere.

TABLE 4.13: MARKET LEAKAGES Retail Category TWK LM – Leakages Durable Goods 35% Semi-durable Goods 35% Non-durable Goods 25% Services 40% (Source: Urban-Econ’s Retail Model, 2011)

From the above household expenditure profile together with the leakages, the following total annual retail expenditure is calculated.

TABLE 4.14: TOTAL ANNUAL RETAIL EXPENDITURE (RAND/ANNUM), 2011 Retail Category Total Annual Retail Expenditure Durable Goods R 38,741, 509 Semi-durable Goods R 76,721, 740 Non-durable Goods R 404,965, 016 Services R 195,196, 500 (Source: Urban-Econ’s Retail Model, 2011)

Apart from the above annual expenditure per retail category, effective demand (demand in terms of floor space- GLA) is also derived from the market purchase power. This is done by means of applying trading densities to the equation, that is, the annual turnover per square meter that a typical enterprise should receive to remain viable. Table 4.15 indicates the annual trading densities applied based on the Investment Property Databank’s (IPD) Retail Performance Benchmarking (2011) for community shopping centres.

TABLE 4.15: ANNUAL TRADING DENSITIES Retail Category Rand/m 2 Durable Goods R 10,762 Semi-durable Goods R 26,188 Non-durable Goods R 24,512 Services R 19,439 (Source: Urban-Econ Calculations based on the Investment Property Databank Retail Performance Benchmarking ,2011)

The future injection indicated below highlights the additional NBS which will be injected into the retail sector which according to StatsSA’s I/O table for the Western Cape in 2012 amounts to 32.7% of the CAPEX and 22.6% of the OPEX taking into account the 40% leakage. This will also include the additional tourism expenditure on non- durable goods. Table 4.16 illustrates the effective demand for retail space.

Urban-Econ 2012© Spatial Economic Input 42 Theewaterskloof Municipality SDF

TABLE 4.16: DEMAND FOR RETAIL SPACE, 2011-2021 Year Effective Demand GLA (m 2) Policy Demand Injection Total Effective Demand GLA (60%) (m²) 2011 33 092 0 33 092 2016 35 915 15 806 51 721 2021 39 693 15 806 55 499 (Source: Urban-Econ’s Retail Model, 2011)

Table 4.16 indicates that the demand for retail space within the TWK LM in 2011 is 33 092 m² which grows to 35 915 m² in 2016 but taking the policy injection into account will provide a much needed boost in demand for retail expenditure.

4.2.4 COMMERCIAL MODEL IMPLICATIONS

The commercial model was formulated due to a lack of accurate and distinctive clarification between the current supply of retail and office property within the municipal valuation rolls. As such the total supply displayed in table 4.17 is representative of both office and retail property available within the TWK LM. The total demand displayed below is thus a combination of total demand calculated in the Office model ( Table 4.10 ) and the Retail model (Table 4.16 ).

TABLE 4.17: NET DEMAND FOR COMMERCIAL PROPERTY (OFFICE & RETAIL) IN TWK LM, 2011-2021 Total Demand (Retail and Total Supply (Retail and Net Effective Demand for Year Office) m 2 Office) m 2 Commercial Property m 2 2011 97,996 522, 795 -424,799 2016 141,684 522, 795 -381,111 2021 151,568 522, 795 -371,227 (Source: Urban-Econ Office and Retail Demand Models, 2012)

Table 4.17 above shows that in 2011 there is a sufficient zoned commercial land for current and future developments (424,799 m2) of retail and office space in the TWK municipality. The total supply was calculated from the municipal valuation rolls and remains constant based on the current (2011) supply of retail and office property.

The figures in Table 4.17 above thus indicate no need for additional commercial (office and retail) zoned land within the TWK LM, and with the significant surplus in land zoned for commercial space, provides opportunities for the municipality to rezone certain areas currently used for commercial purposes, for other land uses such as mixed use (combination of commercial, community and residential) or industrial and residential.

4.2.5 SHORT STAY ACCOMMODATION MARKET DEMAND ANALYSIS

To determine the demand for an additional accommodation facility it is necessary to determine the demand using a calculation based on occupancy rates and growth in the number of tourists visiting the study area annually.

Urban-Econ 2012© Spatial Economic Input 43 Theewaterskloof Municipality SDF

4.2.5.1 DEMAND

In order to determine whether a hotel or similar accommodation facility should be developed tourism statistics need to be used. The source for this specific type of data for this report was Cape Town Routes Unlimited (2011) Provincial and District Tourism visitor statistics.

The demand for additional bed nights for short-stay accommodation facilities of all types from caravans, hotels, guesthouses to bed and breakfasts etc. is calculated based on the total number of visitors visiting the study area multiplied by there average length of stay to determine the number of bed nights demanded of all short-stay accommodation facilities.

Currently the number of tourists who visit the study area (Overberg district) has grown by 1.3 % (CTRU, 2010). In order to determine the demand for beds (projected number of beds sold), the growth rate of the number of beds sold in the study area has been applied to the average length of stay rate to determine the total demand. The projected number of beds sold and the number of tourists has decline across the Western Cape due to the recession by -1.8% but this is much less as the number of tourists visiting the western Cape from 2007 until 2008 declined by -7.5%.

The different types of tourists that visit the study area are indicated in Table 4.18 below:

TABLE 4.18: PURPOSE OF VISIT (TWK, 2010) Purpose Percentage Distribution Holiday 74.5% Business 18% Visiting friends and family 0.7% Education 4.9% Sport 0% Cuisine 0.3% (Source: Cape Town Routes Unlimited, Visitor Tracking Survey, July 2010&Western Cpe Tourism Barometer, Vol 5 Issue 2, Jan-March 2011)

The majority of visitors to the area are on holiday. The majority of these visitors make use of short-stay accommodation. The average tourist length of stay is for 3.3 days in the region. Table 4.19 indicates the total number of beds demanded for all types of short-stay accommodation for the District and the TWK for the next ten years. An injection into the demand for beds has been included in the model based on the additional number of tourists visiting the area and a percentage of these tourist having a length of stay for longer than a day resulting in an additional demand for a bed night. This injection was determined based on an estimate of the increase in visitors as a result of the tourism activities and attractions which are proposed by the policy interventions. This is clearly explained in the previous Section 3 of the report. It is estimated that a additional 6596 number of bed nights will be demanded as an injection, it is assumed that the attractions and activities will be established over a 10 year period therefore the annual injection will be 659 number of bed nights per annum.

Urban-Econ 2012© Spatial Economic Input 44 Theewaterskloof Municipality SDF

TABLE 4.19: PROJECTED NUMBER OF BEDS SOLD IN THE TWK TOTAL ANNUAL DEMAND FOR ALL ACCOMMODATION TYPES TWK LM (per annum) TWK LM (per day) Future Injection per annum 2011 137, 166 385 0 2016 183,343 515 659 2021 244,539 687 659

Table 4.20 below shows the demand for short stay accommodation within the TWK LM. The total supply displayed below is indicative of the total number of beds that are offered by short stay accommodation facilities per day (B&B’s, Cottages, Back packers, Guest Houses etc.) within the municipal area. The total supply of bed nights are multiplied by a percentage indicating the occupancy rate of an average short-stay accommodation facility of 65% per annum and adding in the additional short stay accommodation facilities annual bed nights supplied such as the 100 bed hotel as well as the 20 chalets over a 10 year phased implementation.

TABLE 4.20: NET DEMAND FOR SHORT STAY ACCOMMODATION IN THE TWK LM, 2011-2021 Year Total Annual Bed Total Annual Bed nights Net Annual Bed nights nights Demanded Supplied Demand 2011 137,166 168,850 -31,685 2016 183,858 171,697 12,305 2021 245,226 171,697 73,500 (Source: Urban-Econ Accommodation Model, 2011)

Table 4.20 above shows that in 2011 there was a a surplus in bed nights within the municipal area 31,685 bed nights. By 2016 the demand exceeds the supply by 12,305 bed nights demanded and in 2021 the net demand for bed nights is 73,500 annual bed nights. Therefore by 2016 an additional 33 beds need to be supplied into the area and by 2021 an additional 201 beds to meet the growing demand for short-stay accommodation.

4.2.5.2 IMPLICATIONS

The implications of the growth in the tourism demand for bed nights has an implication on the supply of short-stay accommodation establishments that can be present in the study area. The shortage of bed nights per annum available in 2016 within the municipal area, merits encouragement to develop this niche sector of the tourism industry and increase the number of short stay facilities available. This need for more short stay accommodation facilities in turn aligns with the municipal SDF, where tourism and tourism development has been highlighted as a central drivers for economic development by a number of individual municipalities.

4.2.6 INSTITUTIONAL MARKET DEMAND ANALYSIS

The market demand for a educational facility which includes schools as well as tertiary training facilities is firstly calculated by determining the growth pattern of the number of school going population (05-19 years) in the study area. The demand for educational institution in the study area was determined as follows:

• Using Quantec Data on growth in school going population and household incomes • Demand was calculated based on the growth rate of school going population in the study area:

Urban-Econ 2012© Spatial Economic Input 45 Theewaterskloof Municipality SDF

Currently there are 46 different types of education facilities registered with the Department of Education Western Cape which is listed on their information listing service on. Table 4.21 below indicates the different types of schools supplied in the study area:

TABLE 4.21: EDUCATIONAL FACILITIES IN TWK TYPE OF FACILITY NUMBER Independent School 1 Combined School 5 Pre-primary School 5 Primary School 25 Intermediate School 5 Secondary School 5 Tertiary Education Institutions 3 (Source: Dept of Education Western Cape, 2012 & TWK LED, 2008)

4.2.6.1 DEMAND ANALYSIS

According to Table 4.22 there are various types of education facilities in the study area. The total number of individuals who are in the target age group for primary, secondary and tertiary education is indicated in Table 4.22 below:

TABLE 4.22: INSTITUTIONAL TARGET POPULATION (TWK, 2011) AGE TOTAL 05 -09 Year(s) 9 260 Primary School = 16,747 10 -14 Year(s) 7 487 15 -19 Year(s) 8 106 Secondary School = 8,106 20 -24 Year(s) 8 418 25 -29 Year(s) 9 289 Tertiary Education = 27,135 30 -34 Year(s) 9 428 (Source: Quantec, 2011)

Based on the information gathered by Department of Education (2011) there are currently 18,033 individuals enrolled at primary and secondary educational institutions in the TWK municipal area. At the Boland College campus in Caledon there are only 398 students registered (2011) of which 245 are completing their secondary education and 148 are enrolled for tertiary education. The campus currently has 3 courses for the secondary education students and 2 courses available for students who have matriculated.

Not all individuals are likely to complete their education or even less will attain tertiary education. Based on the community survey data (2007) approximately 89% of the population are likely to have some sort of education (primary and secondary) whilst only 3.2% of the population is likely to attain a tertiary qualification. A leakage needs to be accounted for with regards learners who attend schools and tertiary education facilities outside of TWK in areas such as Cape Town, Hermanus and Somerset West. It is assumed that the leakage for primary education learners is 5% and secondary learners is 15% and tertiary learners is 5%.

Table 4.23 indicates the demand for primary, secondary and tertiary educational institutions in TWK.

Urban-Econ 2012© Spatial Economic Input 46 Theewaterskloof Municipality SDF

TABLE 4.23: INSTITUTIONAL DEMAND FOR TWK INSTITUTION 2011 2016 2021 TOTAL DEMAND PUPILS Primary 14 161 15 405 16 760 Secondary 6 132 6 671 7 257 Tertiary 825 898 977 TOTAL 21 117 22 974 24 994 (Source: Urban-Econ Institutional Model, 2012)

Table 4.24 below shows the net demand for institutional or educational facilities within the TWK municipality. The total supply displayed below represents the total number of educational institutions (primary, secondary and tertiary) that are available and the maximum of pupils that the institution can accommodate. Demand is based on the total population of the TWK LM that fall within the school and tertiary going ages (5 years – 34 years).

TABLE 4.24: NET DEMAND FOR INSTITUTIONAL FACILITIES IN THE TWK LM, 2011-2021 Net Effective Demand Year Total Demand Total Supply (Pupils) 2011 21 117 18, 033 +3,084 2016 22 974 18, 033 +4,941 2021 24 994 18, 033 +6,961 (Source: Urban-Econ Institutional Model, 2011)

Table 4.24 above shows that in 2011 there was an lack of institutional facilities in the municipal area for 3,084 pupils. This means that 3084 pupils amongst the 21,117 could not attend a educational facility due to lack of space on desks within the current available facilities. This is forecasted to increase to 4,941 pupils by 2016 and 6,961 pupils by 2021.

4.2.6.2 IMPLICATIONS

The implication of this institutional model is that there is an ever growing need for more schools and tertiary education facilities especially. There is a gap between the current schools capacity and the number of pupils. This either indicates that there are children not attending school or they are attending school outside of the district. There are very few tertiary institutions and this is worrisome especially due to the fact that the majority of the population cannot afford to attain a tertiary education outside of the district. Thus community land use proposals within the SDF need to make provision for more educational facilities, especially the establishment of tertiary educational facilities such FET colleges.

4.3 SYNTHESIS

The level of activity in the property market (including retail, offices, manufacturing and residential markets etc.) is influenced by the performance of the economy as a whole.

Urban-Econ 2012© Spatial Economic Input 47 Theewaterskloof Municipality SDF

Research has shown that there is, however, a time delay of some 6 – 18 months: i.e. response from the property market to, for example, a decrease in interest rates (a macroeconomic variable that stimulates production) becomes evident in the level of activity in the property market some 6 – 18 months after the announced interest rate decrease.

The relationship between the business cycle and property markets is shown in Figure 4.1 below.

FIGURE 4.1: RELATION BETWEEN THE BUSINESS CYCLE AND PROPERTY MARKETS

6 – 18 month lag Production

Time

Business Cycle Property Markets

(Source: Urban-Econ, 2012)

The following Table 4.25 provides a synthesis of key results of the space demand modelling performed by Urban- Econ for the various land uses identified.

TABLE 4.25: SYNTHESIS OF SPACE NET DEMAND MODELLING RESULTS 2011 2016 2021 Residential Market (low +14,651 +16,501 +17,797 income units) Residential Market ( middle -3,617 -3,040 -2,636 income units) Residential Market ( high -3,960 -3,931 -3,910 income units) Commercial (ha) -42.4 -38.1 -37.1 Industrial (ha) -0.5 +49.1 +69.4 Short-stay Accommodation -31,685 +12,305 +73,500 (bed nights per annum) Institutional Market (Pupils) +3,084 +4,941 +6,961

Urban-Econ 2012© Spatial Economic Input 48 Theewaterskloof Municipality SDF

The above Table 4.25 should be interpreted with due regard to potential unforeseen changes in the market, for instance a decrease in the rate of economic growth, or external shocks to the local or national economy. Therefore, it should be seen as a market perspective, rather than a rigid policy, within which context growth and urban expansion could be planned, facilitated and managed.

The analysis undertaken as part of this section illustrates that there is a demand for various land uses in TWK both currently and in the future. The following section, Section Five provides a strategic analysis as well as the concluding remarks.

Urban-Econ 2012© Spatial Economic Input 49 Theewaterskloof Municipality SDF

Section 5: Inputs into SDF

5.1 INTRODUCTION

Based on the policy review and the status quo and policy review the TWK has a growing local economy with numerous opportunities for continued growth in the space economy. Based on the space demand modelling which was done in Section 4 of the report there is an ever growing demand for different types of land-uses. The demand analysis provides indicators to guide the decision makers with regards to land-use planning. The purpose of this section will be to propose the inputs into the Theewaterskloof SDF based on the opportunities identified by the municipal strategies and documents, the translated growth projects and the land required per town in the municipality.

The following section will provide the linkage between the space demand models and the implications thereof on the proposed projects as initiated by TWK municipality.

5.2 SDF INPUTS

The following Table 5.1 highlights the specific SDF implications for each town in the TWK area. The economic impact of the proposed projects as discussed in Section 3 will have a impact on certain sectors and industries in the area. Certain land use activities need to be undertaken in specific towns to ensure economic cluster development in order to achieve the economic potential of the proposed projects as discussed in the policy analysis. The information pertains specifically to the recommendations made in the SDF (2011).

TABLE 5.1: SDF IMPLICATIONS RESIDENTIAL PROPERTY MARKET Proposed TWK LM Project Land-use Space Demand Implication Grabouw Development of RDP Housing for
Increase land zoned for residential developments. indigent households
Affordability levels are a concern especially with Residential access to bonds and repayment ability of low income households. Development of Gap Housing for
Increase land zoned for residential developments. Residential working class families Development of middle income
There is an over supply of middle income housing. Residential cluster housing Development of ‘Off-Grid Estates’ on
These estates would have to be marketed outside surrounding farmlands of the study area to attract buyers. Residential
There is an over supply of high income houses in the urban areas. Development of Farm Worker
Increase land zoned for low cost residential Residential Housing developments near farms. Agro-processing of deciduous fruit
Increase land zoned for industrial developments. Industrial and wine
Zoned land needs to be in close proximity to farms

Urban-Econ 2012© Spatial Economic Input 50 Theewaterskloof Municipality SDF

RESIDENTIAL PROPERTY MARKET Proposed TWK LM Project Land-use Space Demand Implication to ensure a cluster effect. Training Hub for Tourism and
Very high demand for tertiary institutional Hospitality Institutional facilities.
Increase land zoned for institutional purposes. Development of a training facility
Very high demand for tertiary institutional focusing on ELF. Institutional facilities.
Increase land zoned for institutional purposes. Development of nature based
Additional tourism activities will increase the tourism offerings such as mountain Tourism attraction value of TWK. bike trails
It is not necessary to zone land for such a activity. Niche market Hotel Development
There is a growth in the tourism bed nights demanded. A boutique hotel would be better Short stay suited to the area. Accommodation
There is sufficient land zoned for commercial purposes. Tourism facility development of the
Additional tourism activities will increase the Eikenhof Dam attraction value of TWK. Short stay
Ensure that the property has been zoned for Accommodation mixed-use for commercial and recreational land uses. Development of a tourism retail trade
There is a steady increase in the retail demand. ‘market’ The largest demand is for non-durable goods such as food and beverages. A farmers market would Retail therefore be a good option.
There is sufficient land zoned for commercial purposes. Villiersdorp Development of Farm Worker
Increase land zoned for low cost residential Residential Housing developments near farms. Development of high income housing
There are high income units available. Therefore if options around the Theewaterskloof such a development would take place it would be Dam dependant on buyers outside the TWK. This is a Residential medium risk project.
No additional land should be zoned for high income residential developments. Water sports on the Theewaterskloof
Additional tourism activities will increase the Dam Tourism attraction value of TWK.
It is not necessary to zone land for such a activity. Tourism Development of the
Additional tourism activities will increase the Theewaterskloof Dam attraction value of TWK. Tourism
Ensure that the property has been zoned for mixed-use for commercial and recreational land

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RESIDENTIAL PROPERTY MARKET Proposed TWK LM Project Land-use Space Demand Implication uses. Start of the Wine Biodiversity Route
Additional tourism activities will increase the attraction value of TWK. Tourism
Land is not needed for this land use as it will be a corridor development which needs to be earmarked. Caledon Development of Farm Worker
Increase land zoned for low cost residential Residential Housing developments near farms. Development of high and middle
No additional land should zoned for residential Residential income housing units developments. Development of offices for municipal
There is very little growth for the office market. and agricultural services as well as Utillise existing commercial space which can be tourism and construction revitilised to avoid the risk of leaving existing Office space vacant and creating deadspots in the CBD areas.
There is sufficient space zoned for commercial activity. Development of Retirement units Retirement
Zone additional land for retirement developments. Development of a niche market wine
Additional tourism activities will increase the route attraction value of TWK. Tourism
Land is not needed for this land use as it will be a corridor development which needs to be earmarked. Development of rail links with Elgin
Additional tourism activities will increase the as well as a wagon and cycle route to attraction value of TWK. Tourism Greyton
No additional land is required.
This can be earmarked as an activity corridor. Development of sports tourism
Additional tourism activities will increase the attraction value of TWK. Tourism
Depending on the type of sport tourism facilities space might be needed for example a stadium. Development of conferencing Short stay
There is sufficient supply of land for commercial facilities Accommodation land uses. Greyton Development of education facilities
There are only 2 primary and one private school in focusing of English Medium Schooling Greyton. A high school would be an option. Institutional
Additional land zoned for institutional activities is needed. Development of art-based training
Very high demand for tertiary institutional facilities Institutional facilities.
Additional land zoned for institutional activities is

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RESIDENTIAL PROPERTY MARKET Proposed TWK LM Project Land-use Space Demand Implication needed. Development of existing tourism base
Additional tourism activities will increase the such as wedding venues and attraction value of TWK. Tourism mountain bike trails
There is sufficient supply of land for commercial land uses. Focus on cultural tourism such as
Additional tourism activities will increase the music festivals, art shows and attraction value of TWK. Tourism historical tours in town
There is sufficient supply of land for commercial land uses. Botrivier Development of residential units on
There are high income units available. Therefore if small holder farms such a development would take place it would be dependant on buyers outside the TWK. This is a Residential medium risk project.
Increase land zoned for residential developments keeping in mind the smaller population size and the economic projects for Botrivier. Development of a light industrial hub
There is a demand for industrial land-uses. Industrial
Increase land zoned for this land-use. Development of Retirement units Retirement
Zone additional land for retirement developments. Development of a niche market wine
Additional tourism activities will increase the route attraction value of TWK. Tourism
Land is not needed for this land use as it will be a corridor development which needs to be earmarked. Development of rail links with Elgin
Additional tourism activities will increase the as well as a wagon and cycle route to attraction value of TWK. Tourism Greyton
No additional land is required.
This can be earmarked as an activity corridor. Tesselaarsdal Development of Lifestyle Living
These estates would have to be marketed outside Residential units on small holder of the study area to attract buyers. Residential farms
Land needs to be zoned in rural areas for off-grid estate. Development of nature based
Additional tourism activities will increase the tourism offerings such as mountain Tourism attraction value of TWK. bike trails
It is not necessary to zone land for such a activity. Development of short stay Farm
There is a growth in the tourism bed nights Accommodation Short stay demanded. Farm accommodation would suit the Accommodation sense of place and link to the tourism activities and attractions of Botrivier.

Urban-Econ 2012© Spatial Economic Input 53 Theewaterskloof Municipality SDF

RESIDENTIAL PROPERTY MARKET Proposed TWK LM Project Land-use Space Demand Implication Genadendal Development of education facilities
Very high demand for tertiary institutional Institutional focusing on artisan training facilities. Development of education facilities


Additional land zoned for institutional activities is Institutional focusing on the performing arts needed. Riviersonderend Nature based tourism offering s such
Additional tourism activities will increase the as hiking Tourism attraction value of TWK.
It is not necessary to zone land for such a activity.

5.3 SDF IMPLICATIONS

The TWK SDF (2012) has highlighted specific land-uses which need to be accommodated spatially in each town in the TWK municipal area based on various factors. Table 5.2 indicates the summary of the land-use requirements according to the SDF for the next 10 years.

TABLE 5.2: SDF LAND-USE REQUIREMENTS SUMMARY SDF PROPOSALS UE CALCULATIONS Residential Market (low income 4,301 high density + 8,467 subsidy +17,797 units units) units = 12,768 units Residential Market ( middle 2,423 units -2,636 units income units) Residential Market ( high income 1,833 units -3,910 units units) Commercial (ha) 0m² -37.1 Industrial (ha) 106 ha +69.4 ha Short-stay Accommodation (bed 56,940 +73,500 nights per annum) 18 primary schools Institutional Market (Pupils) +6,961 8 high schools

Table 5.2 indicates that the SDF is allowing for sufficient space to accommodate the growth of the various property markets based on the economic activities proposed by the TWK policies. The pricing of the middle and high income residential units needs to be in accordance with local market trends for local buyers as the current supply is priced very affordable.

According to the SDF each town has a vision and the whether the policy interventions proposed will result in a realisation of that vision has been determined in this report.

• Caledon: The vision for Caledon is to be a leading town in the TWK through the economic stimulation by the focus being on residential, agricultural and tourism development. The residential units demanded in Caledon

Urban-Econ 2012© Spatial Economic Input 54 Theewaterskloof Municipality SDF

will be accommodated by the household growth rate especially for low and GAP income housing. The tourism developments proposed are sufficient to provide a increase in number of tourists and tourism expenditure which the local economy can absorb. The interventions proposed in these different markets will result in economic stimulation and create a demand for manufacturing activities and therefore the new industrial land proposed will be aligned to the potential market demand. Caledon is one of the larger towns in the area therefore the proposal for more community facilities such as educational facilities is aligned to the market demand. • Grabouw: The vision for Grabouw is to increase social integration by providing more residential units which are close to the CBD and business nodes. Grabouw’s economy will be stimulated through more tourism interventions and my stimulating agro-processing. This is inline with the market potential for the area. • Villiersdorp: The vision for Villiersdorp is to be a town focusing on agro-processing as well as tourism. An increase in agro-processing activities will require more industrial space. If the policy interventions occur then the proposal by the SDF to create more space for manufacturing activities is inline with this vision. The proposals for Villiersdorp are inline with the economic market demand analysis. • Botrivier: The vision for Botrivier is to establish Botrivier as the main industrial node within the Overberg district area. If the agro-processing activities take place and the policy interventions are implemented the space earmarked for this is sufficient for this economic injection. • Riviersonderend: The vision to promote Riviersonderend as a tourism destination and agricultural service centre and derive maximum economic growth from the N2 will require more bed nights for tourists and more commercial space for the agricultural services. This demand is inline with the economic market demand analysis for the TWK. • Greyton: The vision for Greyton is to be a sustainable country living settlement. The land proposals are linked to tourism development and to provide housing based on the local residence needs i.e. housing backlog. This proposal is aligned to the economic market demand analysis for TWK. • Genadendal : The vision for Genadendal is to maintain and conserve the cultural significance and historic sense of place within the Genadendal settlements while encouraging tourism development and enhance the agricultural potential of the area. The SDF land-use proposals are aligned to this vision through the light industrial activities proposed as well as the historical tourism focus. The SDF has allowed for CBD revitalisation but not an increase in commercial land zoned which is in line with the findings of the economic market potential findings. • Tesselaarsdal: The vision for Tesselaarsdal is to enhance the rural “life style” and tourism potential of Tesselaarsdal by encouraging tourism and agricultural development while protecting the unique heritage and rural character of the area. The policy interventions proposed for Tesselaarsdal will achieve this vision.

5.4 CONCLUSION

The proposed urban edge in the draft TWK SDF would allow for sufficient economic growth and development in TWK if implemented. The various policy interventions highlighted in the policy review section of the report will provide the necessary catalysts to increase economic activity in the study area. The SDF has allowed for enough space to accommodate these injections and future and historical economic space demanded.

The SDF would need to take into consideration current land uses such as commercial (office and retail) and highlight the under utilisation of existing space within the urban-edge to motivate development in these areas. The SDF has not allowed for additional space for commercial development which is in accordance with what has been concluded by Urban-Econ’s findings regarding net demand for commercial space.

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The SDF has allowed for sufficient land for residential units demanded especially in the high density/ low income households. Due to the financial constraints of National Dept of Housing the subsidy housing demand cannot be met by TWK and this needs to be taken into consideration even though sufficient land has been allowed for this land-use.

The SDF does not take into consideration space for other institutional land demanded such as tertiary education and makes provision for primary and secondary education facilities only. There is a high demand for tertiary education facilities as well which needs to be included in the SDF future land use requirements.

The SDF allows for sufficient space for industrial land-use for the future of TWK. This land-use future demand will be very much reliant on the implementation of the policy interventions as the manufacturing sector in its current form will not create enough demand for such large a space supplied as proposed in the SDF.

In essence this means that the proposed urban edge will not limit economic growth and development (and indirectly job creation) based on the natural growth rate of the TWK economy and in addition the future injection which is proposed and will therefore provide space in which the local economy can grow.

Urban-Econ 2012©