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Hotels and the property market in Durban South Africa

Updated on January 8, 2010

Durban Beachfront South Africa

The Beautiful beachfront in sunny Durban South Africa with Durban Hotels in the frontline
The Beautiful beachfront in sunny Durban South Africa with Durban Hotels in the frontline

Durban South Africa

Durban is a coastal town situated on the Eastern seaboard of South Africa and maintains a sunny climate for 95 % of the year. In the above photo you will notice that the Durban Hotel arena is a mere stones throw from the ocean.

The fairly cheap cost of South African living enables tourists to get exceptionally good value for money when converting Dollars or Pounds to use during their stay in Durban Hotels whilst taking advantage of the spectacular ocean and watersport friendly atmosphere during the day and strolling within minutes of their hotel to enjoy a feast fit for a king in one of the many popular local cuisine style restaurants or fine dining in the popular eateries along the Durban Beachfront.

Since the 1950's the Durban beachfront has adopted the name of the "Golden Mile" due to the close proximity of all the amenities necessary for an day in the sun and a night on the town without the hinderance of needing to utilise motorised transport.

The Durban city centre and surrounds support a population of approximately 2.3 million people and is predominently used as a tourist capital of the province of Kwa ZuluNatal.

The city of Durban boast a new state of the art soccer stadium near completion for the Soccer World Cup in 2010 where a few million tourists are already reserving there place in the sun and hotel reservations for the period are nearing full capacity.

Durban was host to two A1 grand Prix events in which 22 countries took to the streets in February of 2007 and 2008 to compete for their positions in the world A1 Grand Prix rankings.

Durban offers a Hilton hotel within 1 kilometre of the beaches and is permanently linked to the Durban International Convention Centre or ICC as it is known locally to support Summit meetings and Conferences on a global scale.

Durban Hotels on the beachfront

The Suncoast Hotel and Casino - 4 star

The Blue Waters Hotel - 3 star

The Elangeni Hotel - 4 star

The Garden Court Holiday Inn on North Beach - 3 star

The Garden Court Holiday Inn on South Beach - 3 star

The Edward Hotel Durban - 5 star

The City Lodge -3 star

The Hilton Hotel Durban - 5 star

The Royal Hotel Durban - 5 star

Durban Offices to let or for sale

A typical Durban commercial property to let or for sale
A typical Durban commercial property to let or for sale

Residential and commercial Property in Durban

The Durban buy to let market is a strange animal at the best of times. The Durban property market is as diverse as the cultures in South Africa due to the close proximity to each other of medium and high density housing.Using the Durban city centre as the central place and heading south toward The Wild Coast, you will find a mixture of single and double storey dwellings, Blocks of flats usually about four to five storeys high, townhouse developments and the odd occasional retirement village. In the last ten or so years, a trend has grown to seek gated community estates featuring 2 and 3 bedroom duplex and simplex units.

The city centre sits alongside the Durban Harbour Port precinct which caters for 90% of South African containers ports and shipping traffic. This has lead to an exponential growth of the Durban and surrounding areas over the last 100 years with many of the homes from the early 1900,s still utilised as boutique hotels and corporate head office due to the Durban city incentive plan to encourage restoration and preservation through tax incentives.

The fringe of the city centre is treated as an office conservation district with many homes being converted into offices and allowing a mixed node of commercial and retail areas to develop.

The formula propogated by the Durban Town planning department has transformed a once decaying house population into rejuvenation by encouraging the office conversion to instill renewed budget allocation to restoration and refurbishment of these older collonila style buildings. They are now referred to as listed buildings in terms of the National Monuments council and as such the incentive program has really helped to retain a part of the heritage of Durban and Natal which was lovingly known as the last outpost in the early 1980's or the banana republic by some due to the dense banana crops littering the southern coast of Kwaulu Natal.

The conversion of these buildings to commercial property has seen the demand for offices in the buffer zone between the now residential areas around the city of Durban, to have climbed substantially in value since around 2001.With average prices relating to replacement cost for a house type office being around R7 000 per square meter up to as much as R10 000 per square meter depending on size and location, to a more corporate style building of modern building materials fetching in the region of R9 000 to R13 000 per square meter. The modern structures are not to large due to the implementation of bulk allowance restrictions and coverage restrictions being monitored by a strict set of town planning regulations and the availabilty of site larger than 2000 square meters being very scarce.This maintains a level of supply and demand that has not been influenced in any great way by the recessionary effects of 2009.

Houses for sale in the immediate vicinity surrounding the city of Durban are very much dependent on the location, quality of fixtures and finishes, proximity to schools in the area and location in relation to amenities needed by the residents.The buy to let market is mostly entered due to the abundant supply of students living in the area as there no fewer than 20 tertiary institutions within 5 kilometres of the city centre.

With some student prepared to share a room, an average cost of R1200 per student per month can turn a modest 4 bedroom home into a vey lucrative buy to let investments. Prices on homes range anywhere between R6 000 per square meter to a staggering R25 000 per square meter for an estate overlooking the harbour and city.Apartments carry a similar value with beachfront property still some of the cheapest seafront real estate in the world at R 5 000 per square meter for an 80 square meter apartment near the Ushaka Marine World on South Beach.

Durban Factories

A typical Factory to lease or for sale in Durban
A typical Factory to lease or for sale in Durban

Industrial Property in Durban

The industrial property sector is primarily made up of two types of factory style premises. The Port of Durban is owned by the railways corporation known as Transnet and operated by Portnet offering only leasehold land with structures erected theron being owned by the leaseholder with no remuneration on expiry of the lease and reverting to ownership of the prot on expiry.

This means that companies operating within the leasehold setor will need to depreciate and improvements to the sites during their lease duration in order to receive any benefits of the structures capital expenditure unless the structures are removed when the lease expires if not renewed.The lease terms generally renew anything from 10 years to 50 years and are often traded for around R1200 per square meter for land and between R3000 and R6000 for buildings per square meter.

The general value of industrial land can range anywhere between R 1000 and R 2500 per square meter depending on the size, location, topography and slope of the site. Services such as water, electricity and sewer are usually in the cost region of R500 to R700 per square and sometimes include the costs of creating the platform on the site.

A basic building structure for warehousing and distribution is now at an estimated cost of R6700 including land and about R4500 excluding land and also excludes any professional fees involved which range at about 10 to 15% of toal build cost on most projects.

A general warehouse will comprise a concrete slab of roughly 200mm carrying a load capacity of 750 kilograms per square mter for stacking palletised goods and have perimeter facebrick walls to a height of 3 meters and continuing with steel and IBR cladding to a normal height of 6 meters to 12 metres depending on intended use. An office component of 10% of the gross lettable area is included in the cost.Any additional hardened tar macadamised or concrete yard will be added by the developer for around R1500 per square meter and is a must for articulated vehicle carrying 20 foot and 40 foot containers considering their turning circles and offloading abilitites.

Development land for sale in Durban

Developers often offer turnkey projects on land for sale and provide platformed land to start a development if needed
Developers often offer turnkey projects on land for sale and provide platformed land to start a development if needed

Developers in Durban

Some developers in the Durban area will offer a turnkey project whereby the client may preslect a specific tract of land for the developer to purchase and develop to the clients specifications and then on completion of the project, hand over the site to the client on payment of the agreed sum.

This applies to both residential and the commercial and industrial property market in Durban.

I hope you have found this information useful in your attempt to understand the Durban property market and perhaps a little more about the property market in South Africa.


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