The historic Durban Jacobs industrial area, on which development first began some 100 years ago and which is conveniently sited between the existing Durban harbour and the new harbour to be built on the site of the former Durban airport, has become one of the most sought after industrial precincts in South Africa. This was said recently by both Jacques Nagel of the Rawson Property Group’s Berea commercial franchise, who has had eight years in the marketing of commercial property in the area, and Mike Jansen, who along with a residential franchise also manages a KZN commercial franchise for the Rawson Property Group.
The strong demand, they say, has led to serious shortages of stock.
“Although it is likely to take longer than most people seem to realise – every news report seems to have a different start and conclusion date – the new deep water harbour to be built on the site of the former aerodrome will be right next to Jacobs and few precincts could be better suited to serve it. This realisation has led to the current owners being very reluctant to sell and rental stock being increasingly in short supply,” said Nagel.
This situation, he added, presents a complete turnaround on the 1998/1999 era when Jacobs was seen by many as old fashioned and an unsatisfactory area for industry — it was, for a time, outshone by newer rival developments in areas as Briardene and Springfield Park. However from about 2000 onwards prices here began to climb and this year are continuing to do so.
Today, said both Nagel and Jansen, Jacobs has less than 5% vacancies and almost all premises here are able to achieve R3,000 to R4,000 per m2 when sold (Nagel himself is currently selling a warehouse priced at R4,000 per m2).
Rents, too, said Nagel, are rising fast, new leases being signed at a 10% increase on the previous rent and very little space in Jacobs now rents at under R3,500 per m2. This, he said, represents a 10% plus increase on the rents of only two years ago.
Mike Jansen, for his part, has predicted that price rises in the coming year will be up to 5 to 10%.
Asked whether Jacobs’ popularity will continue to rise, Nagel said, “There seems to be absolutely no doubt that this will be the case. This is an area in which you can acquire a more or less guaranteed capital appreciation on property and if you buy-to-let, the rents will increase at a highly satisfactory rate.”