Although there is a serious shortage of land zoned for commercial use in the Durban area and it can take a considerable amount of time to find a property that meets all of a potential buyer’s criteria, the market is considered favorable for new investors.
Prices are low and buyers can pick up unzoned properties which have the potential to increase in value substantially once the rights are put in place.
David Hitch of Rawson Property Group points out that there are few companies at present actively looking to purchase large industrial spaces or to set up shop in new premises of considerable size. His firm is assisting a select group of clients to find properties that will meet their needs, however.
He also points out that current prices are well below the market’s peak 2007 levels and investors who want to find bargains should be starting to look for commercial properties now.
A new commercial trade zone near the King Shaka Airport, Cornubia, is one that should present good opportunities for investors. Cato Ridge is another promising area, according to Hitch. Commercial investors will still be faced with the challenge of finding tenants willing to commit to signing a long-term lease, however.
Rental demand for space in the 400 sq m to 2000 sq m range has been particularly strong recently, resulting in a shortage of space. Rents have stabilized over the past 24 months, and tenants can expect to rents to increase at a rate of five percent per year.
The going rate in River Horse and Briardene is R55 per sq m and in Pinetown they range from R30 to R40 per sq m Rents in Jacobs and Mobeni in the R30 to R38 per sq m range at present.
