|Multi-billion-rand public and private sector investments throughout the metropolitan area were driving the booming Durban market ahead of the 2010 World Cup Soccer.|
Commissioned by JHI Real Estate, the newly-released South African Property Report 2006 showed that Durban’s marketing message - highlighting the synergies of business and leisure opportunities - was translating into more than R10bn worth of investment ahead of the soccer showcase.
These included the R2bn upgrade to the city’s transport system, a R1,6bn stadium, the Dube tradeport initiative estimated around R1,8bn and another R3bn in new hotels.
JHI’s report reflected that the public-private partnership between the eThekwini municipality and Moreland Developments, the property arm of the listed entity Tongaat-Hulett Group, could potentially create another R10bn commercial and residential centre along the north coast.
Land around the Sibaya Casino was expected to attract R4bn in investments including boutique hotels, luxury apartments and housing estates, a shopping centre and office premises.
JHI managing director, Bongani Khumalo, said the Richards Bay industrial development zone had attracted another R4bn in investments, while a planned R4bn small craft harbour and eco-estate project on the KwaZulu-Natal south coast reflected how the development impetus was spreading throughout the province.
However, the continued private-sector driven development in Umhlanga and Sibaya as well as proposed developments in Westville and other decentralised zones had affected the take-up of inner city office space. Khumalo said the central business district (CBD) was competing against other emerging and existing nodes, forcing the city to address several issues.
These include reinforcing the CBD’s potential to drive the metropolitan economy and enhancing its role as a store of investment capital, a tourism and leisure centre, an international logistics management centre, retail node and cultural and entertainment hub.
Khumalo said the current fragmented retail environment prompted thought into an “inner city retail experience” that identified and enhanced distinct nodes like Grey Street, Warwick Triangle and the core CBD.
The report highlighted how a bad buildings programme would address the inner city housing provision. The proposed programme involved supporting and facilitating private sector rehabilitation and development; called on intervention proposals; clarified potential incentives council could offer developers and investors and explored the advantages of national government incentives like Urban Development Zones.
Considering industrial property, the report indicated land shortage remained “firmly entrenched” in the greater Durban area with businesses and developers moving to Cato Ridge for suitable sites. RiverHorse Valley and Briardene in the north had achieved land sales for R600-R700/m2, while smaller parcels under 5000m2 had topped R800/m2.
New projects include the R400m warehouse and logistics park in Mount Edgecombe and a 90 000m2 industrial park being developed in Briardene. The wholly-sold out RiverHorse Valley had generated more than R2bn in investments, while the redevelopment of the David Whiteheads plant into an industrial park reflected the growth in brownfield activity.
Opportunities would arise on the current Durban International Airport site once the facility moved north to the planned Dube development at La Mercy.
“The city is in the midst of an industrial property boom and experiencing a dramatic increase in the demand for space on the back of a strong economy,” JHI KwaZulu-Natal director, Rob Moran said.
The report indicated the Durban office market had shown dramatic improvement with rentals reflecting real growth and vacancies dropping to acceptable levels. A series of 10-year leases reflected confidence in the CBD, despite vacancies touching 19%.
Westway Office Park had doubled to 40 000m2 in the past two years, while Umhlanga, Westville and Morningside remained in high demand particularly for smaller premises. Moran said this situation was likely to further stimulate the development market, particularly within the sectional title segment. The La Lucia Ridge Office Park continued its strong performance with vacancies below 7%.
According to Moran the Durban retail property market remained buoyant with Gateway undergoing a 10 000m2 expansion, The Pavilion undertaking a R32m phase four expansion and La Lucia Mall continuing to upgrade. The 30 000m2 Umlazi Mega City development reflected the national trend for developments in traditional township areas.