Dbn Units Ease Office Space Demand

Capitalising on the success of their three projects in the Umhlanga Ridge New Town / Gateway precinct a local development company is now going ahead with its fourth development in the Gateway area.

To be known as "The Place" this R48m development is sited on the corners of Zenith and Equinox Drives and links in with Inframax's previous developments. Like The Lighthouse and The Sentinel it will have a retail and office component which in this case will extend to the first floor where Inframax will be selling or renting some 1 900sq m of office space.

Paul Mulder, Projects Director of Inframax Developments for KZN, said that, like Moreland Developments, Inframax had identified a strong demand for retail and office space in this area and this, he said, is very definitely on the increase at the moment. What is more, said Mulder, he and other developers are now being asked primarily for small owner-occupier spaces usually between 60 and 90sq m in size.

"There is a tendency in the greater Durban," he said, "to offer buyers 200 square meters or more of floor space on a take-it or leave-it basis. However the smaller the unit the higher your return per square meter can be."

To date in "The Place" Inframax has signed up 22 buyers, many in the range of 54 to 111sq m. Where necessary they allow the buyer to amalgamate two or even three units.

"The response from buyers," said Mulder, "has been excellent and early in December we had only five small office spaces still to let."

Apartments in The Place will be on five floors, and again will each have a bay in the parking basement. These apartments will vary in size from 58sq m to 112sq m and will have one to three bedrooms. They were priced from R585k to R1,37m and all sold out within eight weeks of the launch which took place in December 2005.

"The demand for units below R1 million is quite clearly still exceptionally strong," said Mulder.

Mulder pointed out, too, that previous Inframax projects in this area have within 18 to 24 months increased their value between 25 and 30%. In addition, he said, investors are on average getting R4 000 to R5 500 per month in rentals and this, he believes, is a good return because it represents in most cases 70% of the monthly repayment on their bond. This, says Mulder, is a better return than is now usually achieved in Cape Town and Johannesburg.

On higher priced apartments, he said, the return would probably not be as good but, he added, it is quite common to find buyers – both investors and occupiers – who are able to put down as much as 50% deposit or even, in some instances, to pay the full price in cash.

"At prices of R10 500 to R11 500 per m2 for commercial space (unfitted) and R11 000 to R12 500 per m2 for residential space The Place is already in my view highly competitive in this exceptionally popular area where, let us remember, by the end of next year some 2 000 plus people will be living. This area, I believe, is said to be most successful mixed-use live, work and play area in South Africa."

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