Mayor says when the changes are completed, everyone will benefit
Sparks of regeneration in the Durban CBD are sporadically being ignited, but complete transformation of the city centre into a place where people want to live, work and play is still about a decade away.
When that time comes, property owners in the area, as well as locals and visitors, will reap the benefits, including growth in property values, economic activity and overall appeal.
Construction of the city’s R35billion Point Waterfront development – taking place in three phases over five to 10 years – will undoubtedly play a major role in the turnaround of the area and the CBD. eThekwini Mayor Zandile Gumede says it will attract new foreign investment and enhance the city’s tourism profile. At last month’s sod-turning for the R300million beachfront promenade extension – which forms part of the greater
Point Waterfront development, she also said the project would result in local property values increasing by about 10% and overall CBD property values by 5%.
These estimates may, however, be conservative, says Jonathan Liebmann, founder and chief executive of Propertuity, which has helped lead the redevelopment of the Joburg CBD, was at the forefront of the metamorphosis of the Maboneng precinct, and is investing and redeveloping properties in the Durban CBD and surrounding areas.
“Estimating property values is not an exact science, but the values of property in the Durban CBD are coming off of a low base so I think 10% can be achieved fairly easily.”
However, it will take time before a completely rejuvenated city centre is a reality.
“Obviously every city is different, they are organisms in themselves. In Cape Town, for example, it was a 15-year turnaround for the CBD, and in cities like London and New York, the regeneration cycles are usually 12 to 15 years. In Durban it has already started so it has probably another 10 years ahead of it.”
The main challenges to changing negative perceptions about the city are public services like security and cleaning.
Another hurdle is getting private homeowners who own one or two properties in the CBD to clean up their buildings and attract quality tenants. To achieve this, Liebmann says urban management is required, incentives must be created, and people must be shown their efforts will result in better investments for them.
It is not only the city centre that will reap the benefits of investments and projects like the beachfront promenade extension and Point Waterfront development.
“Once the developments and upgrades are completed, we foresee a rise in property prices and renewed interest,” says Cecily Deetlifs of Tyson Properties Ushaka.
“Sales are happening and the average starting price for a three-bedroom (apartment) is around R2.25million and R1.5m for a two-bedroom. Penthouses start from R6m. Rents have increased over the past two years and demand is great.”
New letting trends in city centre
In bids to address the tenant affordability challenge facing Durban CBD property owners, Andrew Schaefer, managing director of property management company Trafalgar, says many landlords are converting their rental flats to provide separate rooms-to-let, with shared kitchens, bathrooms and common rooms.
This trend is also in response to overcrowding and uncontrolled sub-letting.
“There is huge demand for this kind of accommodation, at monthly rents of between R1800 to R2500 a room.”
Many cannot afford two and three-bedroom apartments at rents between R4500 and around R8500, so they tend to sub-let rooms in such apartments, leading to overcrowding and other social problems.
“Now, properly divided apartments are providing benefits for all. Landlords avoid unauthorised sub-tenants, while the tenants avoid slumlords.”
Also, Schaefer says the initiative sees landlords achieve higher occupancy levels and tenants get clean and safe accommodation at affordable prices.
“The city itself is likely to benefit from more regulated letting and lower defaults on utility payments.”