23 Jan 2013
Industrial real estate in proximity to transportation hubs generally tends to outperform the broader market.
Also the proximity to the national road network makes inland hubs desirable.
According to Broll Property Group, the confidence in these suburbs is reflected by the asking rents for industrial space, currently at just below R50 per square metre except for Riverhorse Valley Business Estate which commands R58 per square metre.
They are likely to go up further in 2013 as demand continues to outpace supply, says Broll.
Anthon van Weers, senior industrial broker at Broll Property Group, explains that just over five years back Tongaat Hulett sold all the available land at R1 000 per square metre, the same land now sells for R1 600 per square metre.
Despite the 60 percent premium, the demand continues to remain high with vacancies under 1 percent.
He says the North is slowly charting its own growth story.
Springfield Park, Riverhorse Valley and Briardene has largely been home to industrial and mixed use buildings varying from the older multi story warehouses along the North Coast Road to brand new developments like the Mr Price and RTT warehouses. Zenprop recently completed the state-of-the-art Mass Discounters warehouse in the heart of the Riverhorse Valley overlooking the N2 and Stefcon Projects has developed a new facility for Camjet.
“Despite the tightness of the market, demand for industrial property in Mount Edgecombe has also picked up tremendously.”
As the airport moved north, the South has shrunk in significance and coupled with scarcity of new land for development, the North is experiencing 100 percent growth in property values, he says.
New developments in the area include the relocation of Altech UEC to the old Trade Centre retail warehouse on the R102. Zenprop recently purchased 44 000 square metres of prime land on Marshall Drive and is in talks with a national chain for a 33 000 square metres distribution facility.
Van Weers says North Durban is fast emerging as a hub for industrial and warehousing facilities due to its proximity to the port, airport and the national road network.
“This part of Durban is seeing significant infrastructure development compared to the South where developers are citing several reasons for the lack of quality industrial development mostly attributable to non-availability of large parcels of land.”
He points out that the North has a huge land bank, so large projects can be put up.
“We are seeing increased interest in inland warehouses and distribution centres connected to sea and airports.
“This growing trend will help companies reduce costs and create new opportunities for developers and investors in the industrial real estate sector,” he adds.
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