Growing demand for commercial property located near busy airports
International airports and their precincts are fast becoming magnetic centres of economic and industrial activity, giving rise to a new appealing commercial property market.
Known as an aerotropolis, this market is widely defined as a metropolitan sub-region where the layout, infrastructure and economy are centred on the local airport.
In the north of Durban, the Dube TradePort precinct is poised for continued growth.
Greg Nafte, co-director of Nexus Property Group, says the rising demand for property in industrial nodes surrounding busy airports is due to the increasing value being placed by investors on a property’s proximity to key infrastructure and transport nodes.
Nafte says: “We’re seeing increased demand from investors and owner-occupiers for industrial property, such as logistics, warehousing and distribution centres, in industrial nodes surrounding major airports as these areas are promising strong capital gains and are showing signs of major future expansion.”
Even property markets in areas near this region are benefiting.
Frank Reardon, divisional director of Broll KwaZulu-Natal, says there has been considerable interest in commercial, industrial and residential property in the north of Durban and into Ballito and iLembe.
“Most of the benefits have been seen in the commercial node of Umhlanga and residential from Umhlanga to Ballito. The surge in residential has seen considerable additional retail, most notably in the Ballito node.”
Strong airfreight markets will also support industrial property such as logistics and warehousing, while special economic zone promulgation will be a catalyst for manufacturing tenants seeking to produce for export, Reardon says. Other commercial property types that could look to operate in Durban’s aerotropolis property market could be call centres and hotels.
In addition to logistics and manufacturing, Garry Hamilton of Hodari Properties, says businesses operating in electronics and pharmaceuticals are also looking for properties in the precinct.
Michael Moss, of Rasmussen Industrial Properties, says: “A number of large manufacturing and logistics companies have moved north, such as Samsung, Laser Junction, Cipla and DB Schenkar. Newer turnkey properties are better suited and more operationally efficient. The aerotropolis also provides state-of-the-art security for a safer investment.”
Furthermore, it is a special economic zone and offers incentives, the main one being that manufacturing companies can apply for 15% corporate tax rather than 28%, Moss says. He believes more companies, especially high-end electronic and pharmaceutical concerns, will see the financial benefits of being in a special economic zone.
“With Phase 2 of the Dube TradePort development set to begin, there remains opportunities.”
Hamilton says more businesses will start to migrate north, thereby increasing demand for office space. There are also opportunities for turnkey developments in both the rental and sales space.
“The aerotropolis is an ideally situated base for your business that’s still close to home.”