A view of one of Durban’s beach fronts.
Like many South African cities, Durban is characterised by its eclectic mix of people, cultures and lifestyles, and this atmosphere of diversity is particularly evident in the heart of the city – Durban’s CBD and its immediate surrounds.
The dynamic in these areas is an interesting one – mid- to high-end residential suburbs surrounding a CBD that is only now beginning to makes strides to recover from serious urban decay. This disparity, according to neighbourhood experts, is not as negative as one might assume, however, and may soon prove to be of considerable advantage to property investors on both sides of the CBD boundary.
“Durban’s CBD suffered a lot from decentralisation trends,” explains Craig Allsopp, one of the Rawson Property Group’s franchisees operating in the area. “All the upmarket shops and offices started relocating to more attractive shopping centres and office parks in outlying suburbs, leaving significantly decreased economic turnover in the city centre and fewer advocates for proper upkeep in the area. The street trading got out of control, pedestrian and traffic congestion became a real issue, and formal retailers and investors began to suffer.”
These days, however, there is a real effort being made to revitalise the CBD, with projects like the West Street Pilot Project, Warwick Junction, and The Point development implementing creative solutions to improve not only the aesthetic appeal of the CBD, but its functionality and user-friendliness as well.
According to Allsopp, this rejuvenation, in combination with tax incentives and resulting investments by major banks in the CBD, has already seen increasing demand in the property market as investor confidence improves. This bodes well not only for the CBD proper, but also its surrounding suburbs.
Bradley Bougardt, the Rawson Property Group’s franchisee for Berea and the surrounding areas, agrees.
“Berea is right next door to the CBD,” says Bougardt, “but was thankfully never particularly badly affected by its decay. Other than a slight increase in crime that saw improvements made in security measures in the area, we remained a popular middle to high-income suburb throughout the CBD’s decline.”
While its proximity to a struggling CBD may not have had much impact on Berea, Bougardt expects the positive changes in the city to have a far more marked effect.
“Berea has the benefit of a lush, quiet and serene atmosphere with extremely convenient access to not only the CBD, but the rest of Durban as well,” he explains. “We already see a lot of middle to high-income earners with families buying into the suburb, and this is likely to increase as business in the CBD picks up. Demand is already rising and property values will follow suit.”
The picturesque and cosmopolitan suburb of Glenwood, one of Craig Allsopp’s areas of expertise, is also predicted to benefit from the renewal of the nearby CBD. “There are a lot of wealthy business people buying properties in Glenwood to renovate,” Allsopp acknowledges, “but there are also savvy investors and first-time buyers snapping up the under R1 million budget buys. Prices are increasing, demand is high, and we have very positive expectations for the area.”
As for the CBD itself, investment potential is now extremely high, and Bradley Bougardt reports exceptional returns being achieved in the buy-to-let market. “Rental demand is good because of the general affordability of the area – CBD properties sell for anything from R100 000 to around R3 million. With new life being injected into the city, appreciation should be excellent, and there is unlikely to be a shortage of tenants any time soon.”
All predictions seem to point to the fact that the rejuvenation of Durban’s CBD will breathe life and vigour into more than just the city centre. Investors would be well-advised to explore both commercial and residential opportunities in the area in order to take advantage of the anticipated growth on the horizon.