DURBAN — Increasing rentals, driven by the shortage of serviced land in the KwaZulu-Natal business hub emerging towards Umhlanga, are forcing corporations and developers to consider shifting their focus westwards to Hammarsdale-Cato Ridge and Camperdown.
The area, halfway between Durban and Pietermaritzburg, on the N3, has housed industrial sites for decades, but political violence and turbulence in the area have prevented significant development for nearly 30 years.
RiverHorse Valley Industrial Park was established as a joint venture between the eThekwini municipality and Tongaat Hulett Developments (formerly Moreland Developments) in 2000, in line with the flourishing development north of Durban.
Situated on the N2, with easy access to the Durban and Richards Bay harbours, the 115ha of developable land has been sold out and an independent report released in February this year heralded the development as having the potential to be a flagship industrial development in terms of productivity, environmental responsibility and socioeconomic upliftment.
However, Tongaat Hulett CEO Peter Staude has consistently bemoaned the significant shortage of new industrial land stock for development as approvals are hindered by bureaucratic red tape.
Maxprop MD Russell Scorer said that consequently the Hammarsdale area was attracting substantial development, primarily among companies seeking warehousing, logistics and distribution centres as well as smaller manufacturing concerns.
Rental deals were being concluded between R120/m² and R150/m² for industrial land, while buildings closer to Durban were closing deals at 10 times those values. High building costs along the KwaZulu-Natal north coast had been credited with being the major factor in the higher rentals achieved.
These factors have also affected office rentals, with Broll KwaZulu-Natal recently achieving gross rentals in a new building on the Umhlanga Ridge at R106/m². Premium A+ grade office accommodation for the Umhlanga node has averaged R95/m², with the new level challenging the rates received in Johannesburg and Cape Town.
Broll KwaZulu-Natal MD Colin Sher said the shortage of premium A+ grade office accommodation and rising construction costs were the key factors in the shift in rentals.
Scorer said companies had become “frustrated looking for land” and were now considering options in the west. However, he dismissed as “industry-speak” speculation that the region would evolve into “the new Midrand”, indicating Durban and Pietermaritzburg could not compete in economic size or strength with Johannesburg and Pretoria.
He said industrial land prices in the Hammarsdale area experienced 100% growth last year and, although coming off a high base, he expected prices to rise another 40% this year.
