Durban - prime locations for commercial property
Prime locations in Durban and to the north of the city continue to sustain a demand for commercial property, reports Chantal Williams, leasing and sales broker for JHI Properties in KwaZulu-Natal.
Over the past year (2011), Williams concluded in excess of 85 transactions for the lease and sale of commercial property in the region, receiving an award for achieving the highest individual sales turnover in 2011 for any JHI Properties broker nationally.
“Standalone homes converted to commercial use and situated in good locations in Durban’s Morningside area, as well as prime office accommodation in La Lucia Office Park continue to solicit a high level of interest and enquiries,” says Williams. “The nodes which are most in demand are predominantly Morningside, Durban North and Umhlanga, with the size range mainly from 80-500sqm most sought after, and occasionally slightly larger premises.
“Businesses showing interest in the marketplace in general are call centres, financial corporations, IT related businesses and retail stores. The retail trade remains strong, particularly in the Musgrave Road area and Morningside. There seems to be a surge in new business ventures springing up within these nodes, including cocktail bars, restaurants and retail outlets. There are also enquiries from those previously working from home now seeking business premises,” she says. In Silverton Road, in the high profile Musgrave area, Williams recently concluded a transaction for the lease of office space for SA Rugby Legends.
Williams says achievable rentals in the Morningside area range according to location, with the Florida Road/Cowey Road and Windermere Road nodes fetching rentals of R100 per square metre* for A-grade premises with on-site parking and good exposure. In the lower end of Morningside in the Stamfordhill Road area rentals achieved are in the region of R75 per square metre. In the Musgrave area, where some 3000sqm of office stock is available, asking rentals are from R100 per square metre.
“In the areas north of the Umgeni River, including Durban North, La Lucia and Umhlanga, depending on location and the grading, premises can achieve rentals of R100 per square metre upwards and generally the smaller the size, the higher the rental,” says Williams. In the new Ridgeside area in Umhlanga, rentals of R135 per square metre are being achieved for office space with sea views, plus parking,” she says.
Also within the growth node north of Durban, in Riverhorse Valley, where rentals are mainly in the region of R85 per square metres, Williams recently concluded the lease of 760sqm of office space for SmartWorx BPO, a company headquartered in Durban and which provides outsourced business solutions.
Comments Tumbikani Nyasulu, CEO of Smartworx BPO: “It was important for Smartworx BPO to position its contact centre close to the target employment pool, ie the areas of KwaMashu, Newlands, Phoenix, Inanda and Durban’s CBD. We also considered the prevailing rental rates at the time and Riverhorse Valley provided a sound balance in terms of property size, location and cost – which at sub-R100 per square metre was quite compelling.”
Public transport a drawcard for Durban’s city centre
In Durban’s CBD Williams recently concluded a transaction for 1036sqm of office accommodation for a call centre, LikeMinds, which has relocated to Durban Bay House - a building which has been upgraded to AAA grade.
Craig Ireland, director of LikeMinds, says the decision to take up accommodation in the CBD was based on the fact that all their staff use public transport. “Being in the city centre makes it very easy for staff to commute from a number of different locations, coupled with the fact that the concentration of retail in the CBD is a positive factor for our staff. A further attraction is the rejuvenation of the building, which will enable it to attract a good calibre of tenant as well as additional business,” says Ireland.
Currently JHI is marketing office space to let in The Embassy, an A grade building which is managed by JHI and is situated at 199 Anton Lembede Street in central Durban. Comments Rob Moran, JHI Properties regional director: “Easily accessible and with sweeping views over Durban harbour and the city centre, this prestigious office block has blue chip tenants such as Sanlam, Wesbank, the CCMA (Commission for Conciliation, Mediation and Arbitration) and the Industrial Development Corporation. The foyer and common areas of the building are currently being upgraded, and The Embassy has secure parking and good security, including access control,” he says.