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