Creativity kick-starts KwaZulu market
Category Property News
RECOGNISING the growing limitations of land scarcity and the potential delays in meeting zoning and servicing requirements, industrial property owners in KwaZulu-Natal are becoming more innovative, creating new spaces from old buildings, many of which are already zoned and serviced appropriately.
Nedbank Corporate Property Finance has seen recent evidence of this shift in the rising number of finance applications for the reconstruction of existing properties as opposed to new developments.
This type of innovative thinking, combined with the apparent gradual resurgence in demand for large warehousing and industrial space in the Durban area, could be the kick-start required to get KwaZulu-Natal’s property market up to full speed again.
However, it is unlikely to be a fast growth path, given the oversupply of commercial space that results in a lot of changes of address but very little new office tenancy. The commercial property market has begun to stagnate somewhat and, in some cases, we are even seeing rental reductions on lease renewals.
This is mirrored in the residential market, where there has been little change in prices for the past three years. Here, too, the market seems more focused on moving than growing, with some new development still taking place in up-and-coming areas like Umhlanga, now viewed by many as the most likely contender to eventually become Durban’s central business district.
There are still signs of hope for a gradual recovery in certain segments of the property market in KwaZulu-Natal. This is particularly true of the industrial sector, where Durban’s role as a key port continues to drive steady — albeit gradual — demand for good production and warehousing space.
A number of recent developments in the province’s industrial property market should bolster this cautiously optimistic outlook, the most significant being the possibility of large swathes of land owned by Tongaat Hulett and land along the Durban-Pietermaritzburg corridor becoming available, as well as the finalisation of Transnet’s deal to acquire the old airport property to extend its port facilities and supply network.
But while these developments would serve as a catalyst for medium-term growth, it is more the evidence of a paradigm shift among stakeholders that could drive long-term sustainability.
Despite this mixed bag of prospects, the region remains a key commercial and industrial hub, with national and multinational groups seeking to set up or grow in SA’s primary port city.
Author: Warehouse Finder
