R11,9 BILLION IN PRIVATE SECTOR INVESTMENTS APPROVED BY THE CITY
Approved building plans can be used as a leading indicator for investment activity in any given economy. In 2021, R11,9 billion (in constant 2021 prices) worth of private sector investments were approved by the City (compared to R8,4 billion in 2020 and R11,2 in 2019), including commercial and domestic building investments, as well as both new investments and upgrades on existing buildings. This indicates an increase in planned building activity when compared to 2019 (technical recession) and 2020 (Covid19 pandemic).
Almost a quarter of these were new industrial or warehousing developments. With the exception of those which may have been put on hold due to the impact of the flooding, these will determine the structure of the City's built development growth in the medium to long term. The City’s growth will therefore be driven by:
· Residential development in the North (R1,6bn), followed by the Outer West,
· Warehousing(or industrial development) in the Outer West (R1,2bn), followed by the Central region,
· Commercial development upgrades and refurbishments in Central and Inner West regions,
· Office and banking space in the North (R136m)
· Shopping space in the North (R130m), and
· Tourism and casino space (R37m) in the North and Outer West
The City’s central region still maintains the top investment spot with R3bn (26%) of investments. However the City’s North and Outer regions are undoubtedly Durban’s frontiers of built investment growth for the foreseeable future, accounting for 25% (R2,84bn) and 24% (R2,78) worth of building plans by value consecutively.
There were noticeably limited formal upgrades and refurbishments planned in the South, and it is expected that some of the few planned may be put on hold following the flooding. The South only accounted for 10% of worth buildings passed; almost three quarters of which (74% or R861mn) are residential buildings, or improvements to the same. This suggests industrial revitalisation by private sector slow. The City can re-ignite planned industrial investment in the South growth through infrastructure upgrades. Regardless of this, upgrades to especially residential buildings on Ingonyama Land which may not have been formally passed should not be discounted, as this is an indicator of informal construction activity in this region, and more importantly, the imminent and increasing demand for infrastructure and services in such areas.
It remains to be seen what the impact of the April and May 2022 flooding will be on built investment plans.