Phoenix Industrial Park is one of Durban’s oldest and largest. It’s the focus of a new retention and expansion programme which will see the city boosting local business as it reinvests in the park’s future. The knock-on effect to real estate being one noteworthy spinoff.
We’ve heard a lot a of talk about public-private partnerships, so it’s good to see one taking off as the Durban Chamber of Commerce and Industry joins forces with Phoenix industrial Park Lot-Owners Association.
Phoenix is situated northwest of central Durban, KZN. It was established as a township in 1976. It is associated with the Phoenix Settlement, built by Mahatma Gandhi. Today Phoenix is the largest “Indian” town in South Africa.
Strategic business, commercial and industrial growth nodes have evolved along with the new King Shaka International Airport, Phoenix Industrial Park, Riverhorse Valley and the Dube Tradeport are important sources of investment and employment.
Sanlam launched the park in 1983. From disused agricultural land to being part of the economic core of the mushrooming northern Durban corridor, Phoenix Business Park has a lot to celebrate on its 30th anniversary. The commercial and industrial real estate value has mushroomed since those early days.
The presence of well established brand names in the area has provided stability to commercial and industrial property. Big names making their presence felt at the Park are: Masterbake- the largest independent bakery in KZN; SPAR Group’s enormous KZN distribution centre as well as ABI, KZN’s biggest beverage manufacturing plant. The 230ha Park is made up 392 lot-owners and 460 businesses making it one of the largest industrial complexes in the country.
The Park provides employment to over 30 000 people from the surrounding residential communities. Business based here contributes R38K annually to the city in rates, though not cheap, reflect the area’s value as a commercial and industrial hub for the city. This area is part of the industrial growth north of the city including areas such as Springfield Park, Riverhorse Valley, Briardene and Mount Edgecombe.
The Phoenix retention and expansion programme has been welcomed by all stakeholders. Chairman of the industrial and lot-owners association Roy Ramkisson told a press conference that the programme would add to efforts to ensure on-going success of the park and the growth and retention of business during tough economic times. The association has for the last ten years improved the security and cleaning up of the park.
However the association needs help during tough economic times said Ramkisson. So other business organisations and the City have been welcomed with open arms. They work together to grow economic impact of the Park and work to retain and create more jobs.
Issues to be addressed by the partnership include infrastructure, maintenance and power supply constraints.
The retention and expansion programme for Phoenix Industrial Park was launched (hosted) recently at Spar’s regional distribution centre where more than 100 heads of industry from the association and City leadership gathered.
The programme will see a cross-section of about 100 businesses surveyed in the Phoenix Industrial Park on local business concerns, ideas, needs and views as to what makes harder or simpler to run business in the area.
Russell Curtis, head of Durban’s Investment Promotions Unit told a press conference that the retention and expansion concept was an international approach that had had fine outcomes in other countries. In fact the City had already run such a programme in conjunction with Durban Chamber in the areas of Prospection, Pinetown and Mobeni.
According to Durban Investment Promotions Unit, 80 per cent of new jobs are created via existing businesses, so it makes sense for the City and Business to forge ahead with their weighty plans and for businesses to get in line and participate for the full benefits to be realised.
In terms of its influence on real estate, surely anything that promotes the stability of business in Phoenix will promote stability of the real estate. In the words of Rawson Properties one of the area’s biggest estate agents: “Phoenix property offers investors a sturdy, long-term investment, which has proven its ability to thrive in all economic climates. More importantly, Phoenix has great potential for growth.”
Residents of Cape Towns have been complaining for lack of one for years and Durbanites believe their city deserves one too. We are talking about cruise ship terminals. It’s in the spotlight as South Africa’s two largest coastal cities seem to be pushing for the same thing. The news came recently that there has been approval for both the projects to go ahead with new cruise terminals in mind.
One may ask what the benefits are. The Durban Port Authority sees a dedicated cruise terminal, close to the ports entrance, as a natural extension of the development around the Durban Point Waterfront. The idea being that this is the most sustainable way to interface the operations.
In Cape Town, Future Cape Website, claims that a ground swell of Capetonians have had the cruise terminal as part of a broader vision for Table Bay Harbour by 2040 in mind for some time. The potential of using the E-berth as the dedicated site for the cruise terminal seems an important part of their vision. Regardless, Transnet has finally given the go-ahead for building a dedicated berthing terminal for cruise liners in Table Bay harbour.
This is in the wake of last year’s decision by the Department of Home Affairs to ban cruise-liners exceeding 200m in length berthing at the V&A Waterfront, citing safety concerns. The move got well-to-do travellers a little bent out of shape as they had to condescend to the likes of the Duncan Dock at Table Bay Harbour.
In Durban the planned terminal will be operated on a seasonal basis in line with the cruise liner schedules, but to ensure an on-going stream of income during the off season, the terminal will double as a meeting, conference and exhibition venue.
The recent breakthrough of Vetch’s deal between the Durban Point Waterfront developers and water sports clubs will also see development towards the harbour’s North Pier, which has been closed to the public since the harbour entrance was widened. Planned development of hotels, restaurants, shops and other facilities will mean the public can enjoy views of the harbour’s entrance channel again.
Transnet claims that the development of cruise terminals in Durban and Cape Town came in response to the tremendous growth that the cruise industry had enjoyed in recent years. Cruise tourism was the fastest-growing sector in the global tourism industry, and was set for continued growth.
In Cape Town the plan is to complete the terminal within the next two years. Identifying suitable investors and operators is still in process. The development has been widely welcomed. Last year 19 visiting cruise liners brought approximately 11 144 passengers to the Western Cape which sustained a number of jobs in the tourism industry.
Opposition to the plan has often been centred on the competing priorities surrounding basic services, and the need for other areas of infrastructure which would serve broader Cape Town. But it seems that tourism will win this one since new jobs are a certainty in this regard.
No numbers are being bandied about yet by either Transnet or the port authority. However digging back to 2010, the ports authority boss Khomotso Phihlela told a press conference that an integrated cruise terminal in Durban could see an investment of not less than R500 million, and possibly up to R2 billion. This would include leisure and retail components, as well as a new Transnet office block.
Regardless of the costs it seems both Cape Town and Durban will see new terminals built. These will most certainly be another tool to bring in tourism to the two cities, boosting their prestige a little and causing a knock-on effect to commercial property value, certainly in precinct of the cruise terminals.
Durban continues to see a significant move North for its commercial and industrial developments. This poses the question, is this at the expense of the Durban South Basin?
Some might say Umhlanga is to Durban what Sandton is to Johannesburg as it becomes a commercial pivot to the industrial exodus north of the city. Placing congestion in the South Durban industrial basin under the cons column and King Shaka International Airport under the pros column it’s not difficult to see why industry is mushrooming in areas north of the city like Springfield Park, Riverhorse Valley, Briardene and Mt Edgecomb.
The significant labour pools of Kwa Mashu and Phoenix also add value to the mix, not to mention what kind of future the new Conubria development holds for labour. Another draw card is the proximity of the R102, N2 and the N3. Industry needs to be close to robust transportation networks. Throw in the new airport and the picture is complete.
Heading North has made sense for some time given the availability of large parcels of land. Such land is not available in the South.
South Durban is not helping itself as infrastructure is neglected, services falter and environmental quality declines. Clearly some vision is has been required with regards to urban management and wise forethought needed in future town planning.
Andrew Layman, CEO of the Durban Chamber of Commerce has been at pains to point out that the move North was not necessarily a move from South Durban. He pointed out that the type of industry moving North is that which favours the airport and is not reliant on the port.
There has been much commentary on the future of the South Durban Basin. One can’t help but find the optimism about the area infectious. The advent of the new cruise terminal is expected to add greater activity to the port in particular and the area in general.
Then there’s Transnet’s new R75 billion dig-out port, to be built at the old Durban International Airport site. Ethekwini aims to rezone Clairwood from residential to industrial to create a back-of-port logistics hub that will complement the dig-out port. Residents fear that they will be forcibly removed, and held mass protests last year, while the city aims to pacify their fears and reassure them that this will not happen. A series of public engagements was held in 2012 and will continue intensively this year to gauge the views of affected community members who reside in and around Clairwood.
It seems clear that although there is a commercial and industrial shift North. The future plans for the South could see twin hubs developing in the city based more on function than history.
Given the green leafy suburb label associated with Westville one may not consider it a node for commercial property, well that’s just not true.
Westville businesses can be found in prestigious office parks across the area. Westville’s commercial properties are in demand and its shopping malls are frequented by shoppers across the greater Durban area and beyond.
Westville is located approximately 13km west inland from the city centre of Durban. With the M13 running through it, Westville is on the route of the world-famous Comrades Marathon between Durban and Pietermaritzburg. Traffic flows steadily through the area which is bound by the N3 and M19 highways making Westville easily accessible for commuters based in Durban, as well as those from the southern and northern regions. This serves to make it a popular base for corporates that service these regions. Westville offers good infrastructure such as shopping malls, top schools, university, sporting facilities and medical services.
A decentralised hub west of Durban, Westville was named after Sir Martin West, Lieutenant-Governor of Natal in the mid-19th Century. Originally a farming area, his farm was transformed into this upmarket residential area, which has expanded and developed into a commercial market.
From a business perspective Westville is an established area that hosts long term tenants. Commercial and retail space is in high demand, especially due to the convenient accessibility to the Durban central business district and surrounds.
The Westville area has a mix of retail and office properties. There are three notable shopping centres, namely The Pavilion Mall at 119 000m², second only in size to Gateway in the Durban area, Westville Mall at 12 793m² and the relatively recently completed Westwood Mall at 34 940m².
One can neatly divide up Westville into four distinctive commercial zones: Westway Office Park, beside the N3; Derby Downs, north of the M13; Essex Terrace between the M19 and the N3 and Westville Central. If one was asked for the zone that stands out it would have to be Westway Office Park – it is in very high demand due to its proximity to the super-regional Pavilion Shopping Centre, accessible public transport and high visibility from the N3.
Featured in a recent Broll Report, Westway Office Park is a fine example of the strides commercial property is making in the area. When complete the office park will release 19 000sqm of AAA office space, highly visible to the N3. There is a parking ratio of five bays to 100sqm of space. Even small retailers are to be included with a coffee shop and a landscaped park.
According to Broll research, rentals have risen consistently achieving a high of R130/m² toward the start of 2010. In the second half of 2010 rentals fell to R120/m² and are holding steady at this price. Vacancies achieved highs of 19% in 2005 and then fell to 6% at the end of 2005. Since then, vacancies have swung back and forth, falling to 0% in the second half of 2007 before climbing to a current 9%.
In short, Westville commercial property demand, sales and supply are up. Space in demand is between 120-600sqm. Highest rentals are pegging at R135 per sqm; medium rentals at R100 per sqm and the lowest are at R75 per sqm. The scope for growth is real and demand is being met. [Stat Source: Broll]
Dotted all over Southern Africa the little Chinese spaza-type shop is now part of the landscape. But in the cities many Chinese traders congregate in what is known as China Towns or China Malls. Although not new to South Africa, China Malls are booming in South African cities and are now flooding Durban, for some noteworthy reasons.
The Chinese community in South Africa can trace its origins back to the 1800 when labourers came to work on the mines in Johannesburg. During apartheid days Chinese were referred to as non-whites except for those from Taiwan who were given the dubious classification of ‘honorary whites’. Visas were tight in the pre 1990 days but now we have what’s being called the Shin Qiao (New Chinese) migrating and working here.
Johannesburg has been associated with the South African Chinese community for some time. But recently Cape Town and Durban have seen growth in Chinese traders in their retail districts. In Cape Town a third China Town shopping centre has opened in Voortrekker Road in Parow recently. There are another two in Ottery and Sable Square. This makes up just less that 200 shops with more planned in phase two at Parow.
It is estimated that there are as many as 50 000 ‘new Chinese’ in Durban as well as up and down the coast running shops of various kinds. Two new Chinese owned-and-run malls opened in Durban in 2011: China city in Springfield Park housing 150 shops and the extensive Oriental City Mall in the city on the corner of Anton Lembede and Mahatma Gandhi.
As early as 2010 the old and dilapidated The Wheel shopping Centre was re-opened as a China Mall. What was just a string of Chinese shops has now taken over two floors with every kind of ware available for the bargain hunter. Management is eyeing the third floor now for even more expansion.
Anthony Lee, manager at China City, quoted in Business in Durban Magazine Autumn 2012, says the port is a big draw. “Goods arrive here in Durban. They used to go to Johannesburg. More and more Durban is being seen as the place to do global business. “
Yinbiao Hao, spokesman for Durban’s Chinese Consular General, quoted in Business in Durban, said “Security is better. (In Durban) The police service is better. There is less bribery here.” Hao says awareness of Durban’s better governance has made the city a viable business option among Chinese businessmen.
Those in the office of Durban’s Chinese Consular General’s office believe events like the 2010 world cup and Cop17 have put Durban tourism and business on the map of Chinese commerce. Many Chinese hadn’t heard of Durban before these events and now marvel at the city’s reputation among the Chinese community in South Africa for its good governance.
Chinese Journalists covering Cop17 developed the motto: “Durban the perfect city for people to live and stay.” Now that’s publicity that’s hard to buy!
Yes you heard right, the speculation is over, the deal is through, Transnet has bought the old Durban Airport site for R1.8 billion. But that’s nothing compared to the investment of an estimated R100 billion over the next 25 years for the vast engineering job that will employ 20 000 people to accomplish it’s task.
The plan is for Transnet to create a whole new terminal with sixteen container berths, five automotive berths and four liquid bulk berths. To give you an idea of the size of the operation, the port of Durban has the following Terminals – Durban Container Terminal, Africa’s busiest (seven berths), Pier 1 Container Terminal(eight berths) , Multi-Purpose Terminal (also known as the City Terminal- 14 berths), Durban Car Terminal (three berths), and Maydon Wharf Terminal (fifteen berths). (Source KwaZulu-Natal Dept. of Transport)
The whole development is intended to reach completion by 2037. But for those who like instant gratification, the first phase should be finished by 2019 at a cost of R50 billion. That causes one to wonder though , if it takes seven years to spend R50 billion and the project is due to continue until 2037 then that’s another 17 years to spend the other R50 billion. Interesting, watch this space.
This news comes on the back of the governments R21 billion infrastructure upgrade for the Durban port over the next seven years. The dig-out port though will ensure the doubling of the capacity for Durban as a container port, enforcing it as the largest in Africa. Durban already moves 67 per cent of the country’s container traffic flows through its port.
The Independent on Saturday quote Safmarine’s Southern Africa cluster manager, Jonathan Horn, as saying that a bigger, more effective port will help shipping lines such as Safmarine, improve transit times, service reliability and vessel turnaround, while offering the benefits of increased efficiencies and flexibility.
The result of the combined existing port and dug-out extension is that Kwazulu-Natal in particular and South Africa in general has a strategic asset, “an effective platform for forging trade linkages between provinces within the country, with neighbouring states and the rest of the world – particularly the Asian and South American subcontinents – offering the province considerable investment spin-offs and opportunities.” The Daily New quoted Ndabezinhle Sibiya, spokesman for KZN Premier Zweli Mkhize.
The implication for property in the area is huge. Already land sales are booming in the south Durban basin. The south Durban basin is already the second largest contributor to the country’s economy. Gauteng is the largest, making up 34 per cent of GDP, and KZN is just under 17 per cent of GDP. Transnet’s dig-out port indicates a catalyst for economic development for the city, the province and the country.
The Independent on Saturday quotes Keith Chetty, a commercial real estate manager at Lighthouse property group as saying: “The demand for commercial and industrial property has increased dramatically in recent times in and around the current port.”
Residents living adjacent to the old Airport would be hoping to get a pretty penny for their homes especially since land is in short supply around the old airport area. One may ponder what will become of the old Clairwood Racecourse site.
Not everyone is dancing for joy though, business owners in the path of the expansion for one. There may be a need for some PR damage control by Transnet with locals too. The Independent interviewed several ratepayer organisations in the area and there seems to be a definite mistrust and disappointment at the lack of communication form Transnet. A point has been raised that some communities in the area were the product of forced removals during the apartheid era, a lack of transparency by Transnet and local government could result in some short to medium term instability in the area.
The municipality needs to inform residents that the area surrounding the old airport will be rezoned industrial to accommodate the expected demand for land once the port construction begins.
There is no doubt that one of the most important spinoffs from the dig-out port will be jobs. In addition to the 20 000 direct jobs claimed, an additional 27 000 ‘indirect’ jobs are asserted with 12 000 sustainable, operational jobs which will remain upon completion for the project.
There are naturally pros and cons, but there’s no doubt the Dig-Out Port is fait accompli and together with the new Dube Port and Richard’s bay port, the KZN coastline and its arterials are likely to be a very busy place for some time to come. Edward Gibbon wrote “The winds and the waves are always on the side of the ablest navigators.” Let’s hope Transnet has done its homework.
Good news from Durban as it talks shop and continues to extend its facilities for recreation. Cycling and construction are on the agenda.
The big Construction Indaba was not as dull as it sounds. With all the construction going on around the city of Durban, infrastructure projects, commercial and retail space and housing development it makes sense to see who’s who in the greater scheme of things. The purpose of hosting this event was for the Municipality to address the issues that were revealed by the Construction Research that the Municipality had conducted in 2008.
The research indicated skills shortages, inadequate access to capital and poor availability to information as the most pertinent matters affecting the accomplishments of emerging businesses in the City’s construction industry.
The Construction Indaba was aimed at empowering emerging and established contractors to become self-sustainable and as well as help them through the industry’s most common difficulties impacting negatively on business growth and sustainability.
The result was much Indaba about access to funding, BBBEE, Training Facilities, Supply Chain Management as well as legal matters. The difficulties noted in the Indaba revolved principally around access to finance and the accessibility of business opportunities. There seems to be a satisfaction all around that voices are being heard and expression was healthy and constructive.
The municipality plans to host workshops on the raised issues in partnership with financial institutions in an attempt to bring resolution. Furthermore the Municipality is planning to host more training sessions to assist delegates with skills development. The Indaba will be an annual event at the request of the participants.
And just when you thought it was unsafe …. Enter the City’s “non-motorised transport plans”, which will eventually link Durban to areas such as Umlazi, Kwamashu and Umhlanga.
But there’s a bump in the road. A cycle lane across the Ellis Brown Viaduct of the M4 Northern Freeway bridge has been under construction for several months, resulting in a nasty traffic snarl up with various lanes, and at one stage the entire highway, being shut at times whilst the new cycle lane was under construction.
Alas the wheels of bureaucracy grind slowly. The City is still waiting for a “final record of decision from the provincial department of environmental affairs for the construction of the ramps that will lead on to and off the bridge.” Huh? This means that the bridge section of the cycle route may not be opened until ramps are created at each end. Apparently we have to wait for May before permission is granted.
The whole route ranges from the Blue Lagoon to Riverside Road. Cyclist are currently stopping at the lane, which has been cordoned off by a concrete post, and tentatively cycling on the road past traffic to get to the other side. Not an ideal situation.
On a positive note, Greg Albert, chairman and secretary of the Cyclesphere Cycling Club in Morningside, said that the bridge looks amazing. “We have seen that it has been completed and it’s looking great; we can’t wait for it to open,” said Albert to the Independent on Sunday. He said once the bridge was opened to cyclists, it would encourage more social cyclists and families.
Ultimately the cycle lane should end at the Bird Park at this stage. Other cycle lanes include those extending along the beachfront and around other important city attractions. Most of these tracks had been established in time for the Cop17 conference and had cost the city upward of R6 million. Interestingly enough the City contributed about 30% to the budget of the tracks with the rest coming from international donors: the German government and the UN Industrial Development Organisation
Other possible cycling routes under discussion include a 2km pathway to allow pupils to cycle from Albert Park to schools in the Addington area. Looking into the future, the city intends to make option to commuters to cycle or walk to work in the CBD by offering “park and pedal” districts. Similarly the new rapid bus and train points will be a focus for future “park and pedal” facilities.
There’s always something positive and constructive going on in the City of Durban.
In one month President Jacob Zuma has opened Kwazulu Natal’s Dube Trade Port and the Eastern Cape’s Ngqura Port. But some of the biggest investment in South African ports is happening at the Durban Port.
National government has declared that it will spend R21billion on the infrastructure of the Durban port over the next seven years. This allocation is part of the R300bn of transport and logistics projects that President Jacob Zuma mentioned in his state of the nation address.
Even though Transnet has spent the last 12 years building the deepest container terminal in sub-Saharan Africa at Ngqura near the Coege Industrial Development Zone outside Port Elizabeth, this does not diminish the need to raise Durban port’s capacity to 5-million 20-foot-equivalent containers a year, from 2,71-million last year. Durban, Africa’s biggest container harbour, handled 61,7% of all containers that moved through SA’s commercial ports last year. Shipping firms among other transport operators have been grumbling for some time about the inefficiency at the port.
The dug-out port project, south of the port, adjacent to the Durban’s industrial heart, was proposed nearly two years ago when options were being mulled over regarding the site of the old airport. It involves spending about R50bn in the first of four phases and was deemed necessary because economic forecasts showed the existing facilities would be inadequate.
Durban Chamber of Commerce and Industry CEO Andrew Layman said: “With a project of this magnitude, the sooner we get going the better. The issue of uncertainty bedevils investment.”
One project at the port which hasn’t been delayed is the R256m project to provide two more truck staging areas capable of facilitating 136 trucks, and a new four-lane dual carriageway, among other facilities, is 68% complete and is expected to be finished by July this year. This bound to bring relief to customers and truckers alike.
Also progress has been made deepening the berths on Maydon Wharf to facilitate large ships to use the berths for the first time and improve ease of navigation. This project, the estimated cost of which stands at R1,6bn when complete, is expected to be completed by year end 2014. Plans to deepen several container berths at the Durban Container Terminal on Pier 2 were well underway. The Island View oil and chemical product berths were undergoing an upgrade too.
It goes without saying what the knock-on effect is on other industrial and commercial property adjacent to the port or in the city in general as these developments progress.
Of course that’s not all that’s going on down at the port: Ranking as one of Durban’s largest leasing deals of its kind in the Durban port area, Growthpoint Properties Limited, the guys who bought the V&A Waterfront, has concluded a transaction with Bidvest Panalpina Logistics (BPL) for 20,767sqm of prime light-industrial space in Rossborough, near the Durban Port, in a deal valued at over R52 million.
Bidvest is a large consumer of Growthpoint’s commercial accommodation across the office, retail and industrial sectors. Similarly, Growthpoint is a major client of Bidvest’s services. It’s reported that the biggest challenge of the project was the timeframe. Construction of the redevelopment began in March this year for BPL to be fully operation by November 2011. Growthpoint’s industrial properties in KwaZulu-Natal are valued at nearly R1.3 billion with its entire portfolio in the province totalling some R4.2 billion in value.
Coming on the heals of the news that Mombasa and eThekwini are to be sister cities it’s encouraging to see the private sector, local and national government work as a team to keep Durban’s port and environs current. Looking into the future is going to secure the port’s role in the present as it play’s it’s role in the economy of the city and country as a whole.
Look at me, look at me, look at me.
After the successful holiday season, Durban isn’t letting the limelight fade any time soon.
Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. Since before the 2010 world cup Durban has been as industrious as an ant farm digging things up here, laying paths down there. New and renovated concourses. A flurry of new restaurants. Sprucing up the informal trading areas. Laying on the recreational facilities.
It seems like yesterday that the Durban streets were awash with green fingered types taking a break from the, what turned out to be, highly successful Cop17 conference – well, from an organisational point of view anyway, ahem.
But just when residents thought it was safe, the City eThekwini plans to host a R31million Top Gear festival in June. It materialised early this year that the ANC-run municipality and the provincial government had signed a 3 year contract for the festival that is to arrive in Durban in June, with municipality and the provincial government expected to carry the financial burden. Oops Durbs is beginning to look like seriously high maintenance.
This comes in the wake of Auditor-General Terence Nombembe’s report for 2010-11, which showed that 364 tenders worth R126m were illegally awarded. Democratic Alliance councillor Tex Collins said the provincial government had signed the Top Gear contract without consulting the municipality. Apparently the event does not submit to the goals of eThekwini’s integrated development plan. Alas there is simply no provision for the festival in the city’s budget.
Opposition parties are hardly shouting yippee at the thought of fast cars and all manner of techno-wizardry gracing the Durban shore. The DA’s Ronnie Veeran said councillors battled to find money for infrastructure in their wards, and asked how the municipality had found the funding for the event so readily. He also said that the tickets of R250-R500 were too expensive for the average Durbanite. The minority front suggested building a permanent race track.
At the end of the day ANC councillors played the familiar tune that the Top Gear festival was similar to the 2010 Soccer World cup or Cop 17 in that such events brought extraordinary revenue to the city, hotel industry and allied tourism industry. The event is expected to generate an estimated income of R35 000 000 in the City’s hospitality industry. R26 000 000 will be spent on local suppliers and legacy programme. How those figures are arrived at is little mysterious though.
Apparently the deal was struck in December last year and the city is bound by the contract – so all the debate is academic. It’s a bit like dad spending all the grocery money on booze – you might as well enjoy the party.
On a more constructive note though Durban’s place in the sun is keeping it in the public eye for a very green reason. Pioneering the way for cleaner energy in South Africa, three partners have come together in a cutting-edge energy-saving pilot project. Durban is the city chosen in this project aimed at harnessing the power of solar energy.
It’s called The Lincoln on Lake Rooftop Solar Project. The three main players are: Growthpoint, South Africa’s largest JSE listed property company; Hudu, a pioneer in the world of Solar Power and the world’s largest solar panel manufacturers Suntech Power. Eskom naturally has a huge role to play to.
Growthpoint‘s Lincoln on lake on Umhlanga Ridge provided the location whilst Suntech and Hudu provided the solar panels and the installation. Eskom shared in the costs. The project is the largest photovoltaic installation to an office building in the province and represents a potential saving of 44kWs, which equates to some 87,000kWhs per annum.
The carbon saving is estimated at being around 89 610kg CO2 annually or 240 trees saved a year. “The latest innovations in the solar energy sector provide increased applications and effectiveness, as well as financial viability,” I-NetBridge quoted Martin Viljoen, Managing Director of Hudu. “We are excited to be part of this resourceful project and to be a participant in the solar energy revolution that that is taking hold in SA.”
The pilot project has serious potential for application in buildings across South Africa. Durban has another reason to say “look at me.”
Looking past Durban’s ‘pretty face’ of the Moses Mabhida Stadium, uShaka, the new beachfront and golden mile, the proximity to world class game reserves and the Berg, not to mention the many attractions of the Seaside life style, one is still compelled to take Durban seriously as South Africa’s third largest, and often forgotten, commercial hub.
It seems Durban is experiencing a flurry of commercial and industrial property and infrastructure investment at micro and macro levels. But the publicity the city has received has been mixed of late.
It was one of those “do you want to hear the good news or the bad news” scenarios at the beginning of the year.
The Good news was that Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. The bad news was the findings of the research study conducted by development economists Urban Econ on behalf of SAPOA that Durban is the most expensive South African city to live in compared with Johannesburg and Cape Town.
The study was based on tariffs applicable to new residential, retail, office and industrial property developments, from zoning and subdivisional fees to building plan fees, connection charges, consumption charges and rates. It turns out eThekwini is on average 30% more expensive than other cities. The major difference in eThekwini is the existence of a ‘development surcharge’ which some are challenging as unlawful. Some say this is causing development to flee the city boundaries. Time will tell.
A point in case may be Ballito, since it’s outside of the grip of eThekweni. Ballito has recently launched a major business services park. Some say the development promises to reposition the North Coast as a serious industrial property contender. The move brings online 9 light industrial zoned serviced platforms totalling 18.5 hectares offering multi-use options from warehousing and factories to show-rooms, offices and mini units.
Given the lack of similar space available between Durban and King Shaka the future looks bright for the business service park.
Back to eThekwini though. Bridge City, in Durban’s Kwamashu/Phoenix intersection has been trading since Oct 2009. But phases of this urban renewal project continue to be built which includes, among other things, residential apartments, a 500 bed state hospital, a regional magistrates court and government offices.
Last October saw the completion of Bridge City’s underground railway station situated beneath the mall. The development which is being linked to a bus and taxi hub will be an intermodal transportation facility easing road congestion and providing convenient transportation for about 613,000 residents in the surrounding areas of lnanda, KwaMashu, Ntuzuma and Phoenix.
A retail warehousing Business Park is the next phase of the 60ha Bridge City development and its launch will bring 12 hectares to the market. The Business Park is ideally suited to retail warehousing, construction related activities and training facilities. The Bridge City Town Centre is priced from R950/m2 for commercial/retailbulk and R300/m2 for residential bulk. The remaining permitted bulk in Bridge City Town Centre is 490 000m2 which will include approximately 4500 residential units, with the balance of 290 000m2 of bulk being for prime business space. Bridge City has been earmarked by eThekwini Municipality as “a catalyst for economic growth in KZN”.
But it’s not all about big developments. Chantal Williams, leasing and sales broker for JHI Properties in KwaZulu-Natal has drawn a lot of attention having 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 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.
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 make a home for the firm in the CBD was because 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.
Finally though not exhaustively, land developer Tongaat Hulett is developing the Umhlanga Ridgeside quicker than you can shout economic slowdown. The four-phased Ridgeside development consists of 140 ha of land creating a triangle bordered by Umhlanga Rocks Drive, the M4 and M41, that links Gateway, La Lucia Ridge Office Estate, The Manors, Lower La Lucia and Umhlanga Rocks Drive. It is ideally positioned along the busy North Coast corridor, just 15 km north of the Durban CBD and harbour and only 10 km south of King Shaka International Airport.
The development, which offers residential, retail and leisure opportunities, and has included major improvements to the road infrastructure in the area, is expected to create 125 000 jobs over the 10 year development period. Investec, Vodacom and BDO have made Ridgeside their KZN home, and in the development sector, Zenprop, JT Ross Construction, Maponya, ERIS and a consortium headed up by FWJK Quantity Surveyors are making their presence felt.
There’s much commercial and infrastructural activity in the city of surf and turf. It’s a healthy mixture of private sector, local and national government input. How the city is run is going to require hard-core engagement from locals and business to see to it that the cream isn’t skimmed off the top for the fat cats that can smell investment from a long distance.