KwaZulu JHI Report 2001

Posted On Monday, 01 January 2001 03:01 Published by
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DURBAN KwaZulu-Natal experienced relatively indifferent growth last year, but a clearer direction and a long-awaited goahead on several major development projects will lift the provincial property market in 2001.

DURBAN KwaZulu-Natal experienced relatively indifferent growth last year, but a clearer direction and a long-awaited goahead on several major development projects will lift the provincial property market in 2001.
According to JHI Real Estate's KwaZulu-Natal Property Market Report 2001, the factors providing market momentum are the green light from the provincial government to move the airport to La Mercy, north of Durban; a R100m commitment from the metropolitan council to the Point Waterfront development; the go-ahead for the city's industrial development zone between the port and existing airport; and casino developments.
The opening of the R1,4bn Gateway shopping and entertainment centre in Umhlanga is also an important psychological marker for the retail sector. At 19%, this sector showed healthy returns against Gauteng (16,9%) and Western Cape (15,8%).
Nationally, the best-performing sector was regional shopping centres, which provided returns of more than 20% on average for the past five years.
KwaZulu-Natal, where almost 60% of plans passed last year were for retail developments, mirrored this trend.
More than a third of them were for Umhlanga and Durban.
KwaZulu-Natal represented 40% of the retail plans passed in 1999, but the smallest proportion of completed retail buildings (11,87%).
In Western Cape 109482m² of retail plans were passed, but the region accounted for 18% of completed buildings. Gauteng had 166929m² of retail plans passed, and the largest retail building completion at 26,66%.
During 1999, 49205m² of new retail space came on stream in KwaZulu-Natal, half of it in Durban. Umhlanga had 12020m² added to its developments, while Maritzburg, Margate and Newcastle all saw developments between 2000m² and 5000m².
The number of plans passed for office space nationally outstripped industrial and retail plans the only area of development not in decline when compared to the 1998 level.
Gauteng again led the field with 174184m² of office space completed, followed by Western Cape with 139411m² and KwaZulu-Natal with 75120m².
80% of the new office space coming on stream in KwaZuluNatal was in Umhlanga.
JHI says Gauteng now has a 39,9% share of the national office market, followed by Western Cape (31,93%) and KwaZulu-Natal (17,21%). Collectively the three cities account for 89% of the country's office market.
The decentralised trend in Durban has continued, with more distinctive nodes developing in the downtown area.
"The office sector can best be described as a case of musical chairs, with little significant growth in 2000," the report says.
Vacancies in the central business district (CBD) were below 15% until mid-1998, but breached 20% in the first quarter of 1999, staying at these levels. However, prime space vacancies were less than 10%. B-grade vacancies in the CBD reached their highest level for three quarters in June last year (24,32%).
In Cape Town, CBD vacancies climbed to 10% in September 2000 from 5,42% in February 1999, while decentralised vacancies rose to 4,62% from 1,71%.
Vacancies in the Johannesburg CBD hovered around 23%, while in decentralised areas the rate moved from 5,1% in February 1999 to 7,69% in September last year as new office space came on stream.
Certain KwaZulu-Natal industrial nodes continued performing well. But obsolescence in older areas pushed some into new developments, despite the cost. A-grade rentals continued to rise with building costs.
Nationally, plans passed for industrial property have declined since 1995, when they peaked at 1,9-million square metres, falling to 849726m² in 1999.
Gauteng accounted for 30,34% of industrial plans passed, followed by Western Cape (13,09%) and KwaZulu-Natal (13,11%). However, Western Cape was first in terms of new industrial buildings coming on to the market, with 37,77%, followed by Gauteng (27,17%) and KwaZulu-Natal (20,78%).


Publisher: JHI
Source: JHI

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