F1GP return to SA: what’s potentially on the cards for Kyalami?
Many F1 Grand Prix enthusiasts will remember the most recent F1 Grand Prix at Kyalami in 1993. Ayrton Senna took his eye-catching V12 McLaren onto the track, finishing second behind the French legend Alain Prost. Fast forward 32 years, and petrolheads and Grand Prix enthusiasts have been following closely as Minister Gayton McKenzie’s goal of having F1 action return to South Africa comes closer to fruition. With Joburg’s Kyalami Circuit having been given the green light for upgrade, it’s one step closer to all systems go.
3Cube Property Solutions takes a deep dive into the history of Kyalami, the renovations, the global influence of being an F1 host country and the potential impact on property pricing around the track.
A brief history of the Kyalami Grand Prix Circuit
The Kyalami Grand Prix Circuit story begins in 1961, when it quickly established itself as Southern Africa’s premier motorsport facility. The wheels hit the tarmac on 4 November of that year, when John Love and Dawie Gous took an epic victory at a nine-hour race in a Porsche 550 Spyder. Kyalami soon became regarded as one of the world’s top ten Grand Prix Circuits.
In 1989, the top half of the property was sold, and a new version of Kyalami came to exist – with many feeling that the magic created by the original long straight was gone.
In 2014, after a period of decline, the property was put up for auction and was purchased by Toby Venter, a name synonymous with the motor industry and motorsport. Venter is Chief Executive Officer at LSM Distributors, the company responsible for importing high-end automotive brands including Porsche, Bentley and Lamborghini.
Renovations undertaken at Kyalami
With the green light for racetrack upgrades having been given, the areas to be improved include the run-off areas, barrier systems, debris fencing, kerbs and drainage systems. These multi-million Rand upgrades are being privately funded by Venter – despite the fact that South Africa has not yet officially been given the nod to host a Grand Prix in 2027.
The benefits of being an F1 host
The financial benefits of being an F1 host city or country are plain to see. A classic example can be seen in the example of the Austin Metro in Texas, USA. The F1 United States Grand Prix was held at Austin’s Circuit of the Americas. Between 2012 and 2015, the total economic impact on the area amounted to $2.8bn. According to the same report, the Azerbaijan Grand Prix held in Baku in 2016 and 2017 created $277.3m of economic value.
Direct economic value is far from the only advantage of hosting a Grand Prix event. These events are broadcasted to over 200 territories around the world, creating phenomenal exposure for host cities. This means that tourism flourishes both during and after the event – and the number of jobs created grows from strength to strength.
Impacts on property demand around Kyalami
The return of the F1 Grand Prix to Kyalami, if indeed it goes ahead, is set to provide a boost in demand for local commercial and industrial properties. Local commercial properties benefit from the heightened visibility, and hotels, restaurants and other hospitality-based businesses will see increased occupancy and foot traffic.
The aforementioned F1 event in Baku, Azerbaijan, provides a glimpse of how infrastructure can be improved as a result of the racing action. Baku’s roads, lighting and public transport were enhanced, which contributed to the appreciation of commercial real estate in the city.
From an industrial property perspective, a great example of a spike in demand can be seen in Silverstone, UK. F1 Grand Prix’s popularity led to growth for an array of businesses, including manufacturing specialist Silverstone Composites. As a service provider to six F1 teams, Silverstone Composites has moved into larger premises.
Formula 1 has a rich history and a strong record of driving economic growth. This, coupled with Venter’s legacy in the motorsport world and McKenzie’s passion for F1, could mean great things for Gauteng. If your business is growing due to this or any other development, and you need new premises in Gauteng or the Western Cape, get in touch with 3Cube Property Solutions today.
Image credit: Ferrari Day at Kyalami by NJR ZA | Wikimedia | https://tinyurl.com/3xf2dsz4