From rapid urbanisation and inner-city decline to overstretched infrastructure and negative externalities such as congestion, pollution and urban sprawl, mounting pressures are forcing developers and municipalities to prioritise long-term sustainability in design and financing.
In KwaZulu-Natal this shift is already taking root. Banks such as Absa are making environmental, social and governance (ESG) compliance a nonnegotiable condition for commercial property loans.
Once defined purely by lifestyle and luxury, major developments such as Salta Sibaya, Zimbali Lakes, and the Westown precinct in Shongweni are being shaped by rigorous standards, signalling a fundamental reset in how large-scale projects are conceived, funded, and delivered.
Absa Corporate and Investment Banking’s head of commercial property principal investments, Simon Chemaly, tells Business Day that the bank’s participation in providing innovative finance mechanisms has helped alleviate some of these ESG challenges, while the economy is under pressure from job losses and infrastructure obsolescence, resulting in falling property values.
Urban migration continues to accelerate across SA. How are municipalities adapting to this growth, and what role does innovative financing play in supporting sustainable urban development?
Migration to cities is driven by social, economic and political aspects, and the priority of municipalities to ensure sustainable development becomes imperative. This growth in urban population has not been matched by adequate supporting infrastructure or innovative financing mechanisms for cities.
What measures are in place to ensure that developments in economic hubs do not lead to displacement or the gentrification of local communities?
While the banking sector does not have direct control over urban planning or land use, institutions such as Absa incorporate social risk considerations into their credit and investment assessments. This includes identifying and addressing potential issues such as displacement, loss of livelihoods or unintended socioeconomic exclusion.
To mitigate these risks, banks increasingly engage with developers, municipalities and other stakeholders to promote integrated, community-sensitive development models. For example, development proposals in economic hubs are evaluated not just on commercial merit, but also on their alignment with spatial transformation objectives, public consultation outcomes and how they contribute to affordable housing, public infrastructure and broader social inclusion.
In line with ESG principles and national frameworks like the Spatial Planning and Land Use Management Act, banks encourage developments that are inclusive, reduce inequality and foster long-term sustainability.
Can you share examples of Absa-funded developments successfully uplifting local communities?
Absa financed about R2.2bn in the mixed-use development Umhlanga Arch. As an iconic mixed-use development, it combines upscale residential apartments, state-of-the-art office spaces, and a vibrant retail sector within a sleek, contemporary design. The residential offering includes 30 New York-style lofts and 162 modern apartments, designed to cater to a mix of urban lifestyles and preferences.
The 45,000m2 development is made up of commercial office space formed in the shape of an iconic glass arch, a 203-room internationally acclaimed Hilton Hotel, 170 residential apartments in a 32-storey tower block and retail stores and restaurants, and an SMG dealership for BMW SA. The development was conceptualised on a design incorporating the “live, work, play” model.
What is Absa’s long-term vision for supporting socially conscious economic hubs in SA and the broader region?
Our vision for supporting socially conscious economic hubs is centred on fostering sustainable development and driving economic growth through innovative financing solutions.
This vision is reflected in several key initiatives and projects. Absa has actively participated in financing significant property developments in KwaZulu-Natal, such as the Westown Precinct. This mixed-use urban centre, situated between Durban and Pietermaritzburg, is designed to create 8,500 permanent jobs and attract R15bn in investment over the next decade.
The development focuses on upgrading local food, water, medical, educational and environmental infrastructure, contributing to the eThekwini municipality’s Shongweni urban development strategy.
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