Insights into Durban's commercial & industrial property landscape -December 2023

Insights into Durban's commercial & industrial property landscape -December 2023

Insights into Durban's commercial & industrial property landscape 

Over the course of the last year, the warehousing sector in Durban has not only demonstrated resilience but has truly excelled in performance. The industrial property market, particularly catering to logistics-based users, remains the most favorable among non-residential property types across South Africa. A notable trend with industrial tenants and in particular the larger operators in Durban is that are actively seeking more efficient properties with enhanced security, steering away from flood-prone areas. The demand for warehouses situated in close proximity to the port along with land that is suitable for container parks has surged significantly; however, the available stock remains limited. The consistent high performance in the warehousing sector highlights its strong standing within the broader real estate sector.

In the landscape of Durban's industrial sector, notable developments are currently underway, poised to significantly contribute to the enhancement of the region's economic infrastructure. These include The Brickworks alongside Glen Anil, offering a substantial 760,000m² of platformed industrial space available for lease and joint venture opportunities. Similarly, Giba Business Estate, located on the outskirts of Westmead, presents a noteworthy offering with 200,571m² of platformed industrial space for lease and joint venture opportunities. Additionally, Clairwood Industrial Park in Mobeni offers approximately 350,000m² of premium warehousing space available for lease. It is noteworthy that options within Clairwood Industrial Park are currently limited, underscoring the desirability and demand for industrial spaces in this particular node which is in close proximity to the Durban Port.

The office market is still in the worst position of the three major non-residential property types due to its significant oversupply, however, Durban seems to be the exception with the exclusion of the Durban CBD. The momentum toward returning to offices is notable, partly driven by a preference for working in offices with reliable power, given the challenges of load shedding at home as well as a huge demand for call centre space. Moreover, a significant number of tenants are choosing to leave the Durban CBD. The CBD faces various challenges, including security concerns, traffic congestion, and inefficiencies in its buildings. Consequently, tenants are opting for neighbouring suburbs as their preferred office space destination.

South Africa has earned global recognition as the premier front office Customer Experience offshore location. Factors such as our skilled workforce, favorable time zones, neutral accents, and high levels of empathy position South Africa as one of the most sought-after destinations for best-in-class outsourced business services. This trend is expected to continue and, in turn, generate increased demand for call centres in the Umhlanga area.

However, an area of concern arises within the domain of office developments, particularly in the Umhlanga area. The conspicuous absence of new office developments warrants careful consideration, particularly in response to the persistent demand for more extensive office spaces at competitive and economically viable rates.

Deal Core Property Group is delighted to announce the recent facilitation of two prominent leasing transactions within the warehousing sector, specifically situated in the Western suburbs of Durban. Stewarts and Lloyds, a key industry player, have secured a prominent location at 42 Mahogany Road, Westmead, leasing a warehouse measuring 3227m². Additionally, Allied Steelrode has strategically positioned itself at 5 Otto Volek Road, New Germany, in a warehouse spanning an impressive 4531m².

These transactions underscore the sustained demand within these strategic locations. The Western suburbs of Durban continue to prove highly sought-after, characterized by their advantageous geographical positioning, providing seamless accessibility from neighbouring areas. This strategic positioning enhances operational efficiency and underscores the attractiveness of these areas for businesses in the warehousing sector.

Deal Core Property Group remains committed to facilitating successful transactions that align with the unique needs and preferences of our clients. As we navigate the dynamic landscape of commercial real estate, we look forward to continued collaboration and the opportunity to assist businesses in securing optimal locations that meet their operational requirements.

Deal Core Property Group specializes in the realms of Durban's Commercial and Industrial Property sectors. Our commitment is to tailor our services to meet the distinctive needs of our clients within these dynamic markets. We are always on the lookout for new stock to add to our offerings. If you have commercial or industrial properties available, we invite you to connect with us to explore potential opportunities.