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Durban’s Beach Hotel ticks all the right boxes for investors

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“This is a hotel with a location that surpasses even the most illustrious executive accommodation along the promenade."

Topping the bill in a portfolio of retail and hospitality properties to be sold by Reliance Auctions at the Durban Country Club on July 19 is the iconic Beach Hotel – a home-from-home for thousands of Gauteng families and matriculants for many decades.

Gooderson Leisure holds a 20-year-lease for the 1250m² 11-storey property with nearly 14000m² lettable floor space at the end of OR Tambo Parade on South Beach. The hotel – to be auctioned with a reserve price – should provide a 7% to 9% yield on investment, says Reliance CEO David Soutter.

Soutter says the reasons why “The Beach” ticks the right boxes for investment decisions includes the fact the Gooderson lease is “triple net” which means that the tenant pays for all upkeep expenses apart from 30% of the rates and insurance.

Also, it earns a current net income of just under R6.2 million a year with annual escalation of 7%; is close to the R39billion Durban Point Precinct Development project; is in excellent condition; and has underground parking for 32 vehicles.

“Even for an experienced auctioneer, it is very difficult to predict what price will be achieved for The Beach Hotel. I simply do not know of a similar property coming to the auction market in Durban – or South Africa, for that matter.”

Investors tend to be influenced by factors such as:

* Condition of a property;

* Location;

* Strength of tenant;

* Duration of lease;

* Lease conditions – whether triple net or not.

* Future development plans for the area.

“There is no doubt The Beach Hotel ticks all these boxes – and even more because of public awareness and the special place it holds in the hearts of so many South Africans from all walks of life.

“This is a hotel with a location that surpasses even the most illustrious executive accommodation along the promenade. For the new owner, it should achieve a healthy return on investment,” Soutter adds.

Also on offer at the major Reliance Auctions on July 19 will be four properties in Vryheid, KZN; as well as properties in Malelane, Mbombela and Kaapmuiden in Mpumalanga.

For more information and viewing arrangements, contact David Soutter on 083 325 7152 or visit


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