Durban, South Africa

In the last financial year Colliers KZN has concluded commercial and industrial deals in excess of R200 million.

The majority of these deals have been done in the industrial sector which shows every indication of having some way to go before reaching the peak of the property cycle. In this regard a continued shortage of stock has seen rentals harden across the board and although interest rate increases over the last 18 months have led to a curbing of the appetite shown by investor purchasers.

However, the end user purchaser market is still relatively buoyant as purchasers continue to seek value as a hedge against increases in both future rentals and building cost inflation. A significant area of increased investment activity is the purchase and redevelopment of older, secondary industrial buildings and the conversion thereof to upgraded more functional and marketable facilities.

The commercial office segment also shows signs of continued strength with gross rentals in recognised commercial nodes now regularly exceeding the R100.00 per m² mark. Preferred location destinations remain the Umhlanga Ridge, Westville and Morningside areas.

Current opportunities for growth in the commercial and industrial sector include the following more high profile commercial developments and government-funded infrastructure projects from which one can reasonably anticipate or expect a favourable property multiplier effect:
• Durban's new International Airport and iDube Tradeport situated at La Mercy North of Durban.
• Final phases of the Umhlanga Ridge development node including the Riverside Ridge triangle development.
• The Bridge City mixed use development in the Inanda, Ntuzuma and Kwamashu region.
• The Moses Mabhida Stadium.
• The Point precinct development including widening of the harbour entrance.

Opportunities for growth and investment in the older, more established industrial areas also cannot be discounted and one ignores this to one's detriment - older areas such as Jacobs and Mobeni have recently experienced an upsurge in interest both from investors and end user purchasers and accordingly rentals and selling prices per square metre have increased considerably more compared to other areas because they are coming off a traditionally lower base.

Rentals in Jacobs and Mobeni range from R25.00 to R35.00 per square metre and selling prices from R2 500.00 per m² to R3 800.00 per m². Westmead, Pinetown and Prospecton rentals range from R30.00 per m² to R45.00 per m² and selling prices from R2800.00 per m² to R5 500.00 per m².

Overall, the outlook for the commercial and industrial market is still fairly positive and Colliers believes that KZN can look forward to some more solid growth in all sectors.

Colliers International South Africa was established in KZN in 1892 and is the local representative of Colliers International. We were one of the first real estate companies to recognise the importance of local knowledge on a global scale – global knowledge local expertise and service.

About Colliers International

Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 10,092 employees span the world in 267 offices in 57 countries. On a worldwide basis, Colliers manages 672,945,918 square feet, and has revenue of $US 1,620,958,349.

Contact Information

Grant Salomon

Director Commercial and Industrial Broking
Tel. +27 31 267 2001

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