Durban market overview
A year in review
- Mieke Purnell
Durban’s office market has largely moved away from the traditional central business district (CBD) toward the uMhlanga, La Lucia and Ballito nodes. The metropolitan’s commercial real estate sector has had to contend with severe externalities over the past two years, over and above the impact of the global pandemic, resulting in increased operational risk for businesses based in the region. However, the strong labour market and relative affordability of the office sector, has created a favourable environment for the BPO sector. Furthermore, the metropole has a commercial base that is unlikely to be relocated over the short to medium term, supported by the various port infrastructure of the surrounding area.
Durban has faced serious supply issues with respect to contemporary industrial stock in 2022. Floods damaged major warehouses and factories, and many businesses struggled to find alternative premises while repairs were underway. The stock availability at this stage was already limited due to several properties being damaged during riots in 2021. Despite this, the metropolitan’s industrial market is underpinned by demand fundamentals that will likely not change significantly in the short to medium term. The consequent demand-supply disequilibrium in Durban’s industrial market has resulted in strong rental growth opportunities over the past 12-months, as the outlook for the sector remains positive backed by a steady recovery in business confidence.
The greater Durban’s tourism industry performed relatively well through a large portion of the pandemic, benefiting from pent up demand from the domestic leisure tourism market. The region’s favourable climate, proximity to Gauteng, and quality tourist amenities all contributed to the general area’s appeal. Durban has now recovered to pre-pandemic levels from a rates perspective, and only just lags this benchmark in RevPAR. uMhlanga is exceeding prepandemic levels across all key performance indicators. Greater Durban, and more specifically uMhlanga’s hospitality sector is poised for further growth in 2023. The sector is opening up to international travellers through additional airlines providing direct routes to the King Shaka International Airport.