Market moves to environment-friendly buildings, mixed-use housing, student digs and new life in CBDs
This year has been a mixed-bag for commercial property in Durban, with some sectors struggling and others surviving the current economic climate.
If one has to pick out the game changers in the city and the country, green buildings, student housing, mixed-use precincts and CBD rejuvenation stand out.
The impact of e-commerce on bricks-and-mortar retail and technology on office accommodation are also two significant and growing trends.
The global and national drive to “go green” continued gaining momentum in South Africa’s commercial property industry this year, with KwaZulu-Natal among the country’s – and the continent’s – leaders in green buildings and operations.
Data from the Green Building Council of SA (GBCSA) revealed the province was in third position for the most number of certified Green Star Rated buildings in the country and Africa.
Gauteng leads the way with 147 certifications, followed by the Western Cape with 78. Overall, KZN has 33 Green Star rated buildings, the GBCSA said.
Frank Reardon, divisional director for Broking at Broll KwaZulu-Natal, says Durban still lagged behind other main centres, though there were green buildings in newer decentralised nodes in the city, proving eco-friendly building and operations was still a focus for commercial building owners and managers.
Another trend in commercial property this year has been a growing demand for shared and serviced office space as more people work remotely or run their own small-to medium-businesses. Large corporates are turning to co-working spaces for added flexibility and affordability.
“These co-working premises are modern, high-end facilities offering a variety of workspaces ranging from a single desk to an executive suite or conference venue,” says Leon Breytenbach, national manager of the Rawson Property Group’s commercial division.
“They offer state-of-the art-services such as reception, copiers, WiFi, phone lines, cleaning services and a kitchen.”
Technology has also fuelled the growth of e-commerce, which is impacting heavily on bricks-and-mortar retail property. Along with changing consumer habits and technological disruption, the growth of online shopping – which has played a role in Toys R Us in the US filing for bankruptcy – has been a major catalyst for retail shake-ups as traditional shopping centres face increasing pressure to adapt. Local retailers have fought this challenge by incorporating entertainment and events into their offerings.
Possibly the biggest commercial property demand currently, both in Durban and across the country, is student accommodation. Investment in such property holds huge potential for private developers.
Highlighting this sector as a hot trend in property this year, Pam Golding Property Group chief executive Dr Andrew Golding says: “There is a severe shortage of student housing in South Africa, a trend evident in many metros in prime global cities. Flats in central blocks with excellent security, good quality finishes and a mix of tenants – not only students – are highly sought after.”
An exciting development this year is the planned rejuvenation of the Durban CBD. The eThekwini Municipality’s clean-up programme to improve the inner-city aims to attract further investment by ridding the CBD of its association with crime and grime. Companies and investors started expressing renewed interest in the CBD.