Waterfront , North Beach , Morningside , Berea , Umbilo , Glenwood and the Albert Park Precinct . These areas have traditional inner city characteristics – high density living in the heart of retail and transport hubs but there are also some residential suburbs that are on the border of the inner city .
What Durban inner city areas have the most potential for property investors & why ?
The areas in which we are seeing the most interest from property investors are the South Beach area and the lower Glenwood / Berea areas of Durban . The South Beach area has experienced a revival in recent times . Main factors driving the demand are the close proximity to uShaka Marine World and the Point
The Point Waterfront development area has seen investors anticipating a positive impact on property values . In addition , the area is also experiencing rejuvenation , with the ongoing revamp of Addington Children ’ s Hospital as well many owners and body corporates spending capital on refurbishing their buildings .
The Glenwood / Berea area is another popular area for investors . This is driven by the area ’ s close proximity to the CBD , as well as hospitals and educational institutions such as the university and technical colleges making it attractive to investors hoping to capitalise on the student accommodation shortage . There is still good value to be found in this node for those investors with an appetite to convert or renovate .
What makes Durban inner city a more attractive opportunity for property investors as opposed to other inner cities such as Johannesburg and Cape Town ? Investing in Africa ’ s biggest port is Durbans primary appeal to Investors . Especially with the talk over the last few years of Transnet ’ s plans to expand the port further and increase its container handling capacity . Residential property around the port area is still very popular with investors .
In addition , property prices are very competitive compared to some parts of Cape Town and Joburg . Ultimately the main reason investors find Durban appealing is the return on investment . Many of our residential property investors are experiencing returns of between 13-18 %.
What are Durban inner city property investors ’ main challenges ? The main challenges experienced are with local authorities . The Problems Building By-law was finally promulgated around June / July 2015 . Through this by-law , eThekwini Municipality intends tackling the issue of derelict buildings in the City by identifying , controlling and rehabilitating problem buildings in the city .
Unfortunately enforcement of this by-law by the municipality has been extremely slow and almost non-existent . The other challenge for investors in Durban is plan approval that can take many months . Rental product / Tenant focus
What kind of residential rental property product / configuration have you seen to be the most popular in Durban and why ? Self-contained one bedroom , bachelor and studio units are popular and experience the highest return , although demand for these varies based on specific nodes .
The standard unit size in Durban tends to be smaller than the rest of the country . Bachelor units range in size from 20-25m ². Although these small units are popular , we recommend over 30m ².
Who are the residential rental tenants of the Durban inner city ? How does it differ from one inner city area to the next ? The tenant demographic in Durban is node specific . South Beach , Glenwood and Berea are popular with young families and couples . On the other hand , the inner city and Albert Park Precinct is more attractive to foreign nationals and students .
Developments & future focus
What are local government ’ s plans for development ? What is the traction and roll out / timeline of this ? The eThekwini Metropolitan Municipality recently launched its inner city Local Area Plan ( LAP ). The draft plan was launched in March 2016 . It ’ s a long term plan and very ambitious .
In order for plan to succeed the city requires participation and buy-in from private sector to ensure practicality and roll out .
What opportunities exist for property entrepreneurs as a result ? Although the plan is still in its infancy , many new residential nodes have been identified for development to meet the increase in urbanisation that is anticipated .
RESOURCES
TUHF
www . reimag . co . za JUNE 2016 SA Real Estate Investor 41