Central business districts (CBDs) serve as economic and commercial hubs of most cities globally. However, research on property trends in Durban by eThekwini Municipality’s Economic Development Unit suggests that property investment in eThekwini is shifting from the existing central business district (Point, South Beach, North Beach, Durban Beach Front, Esplanade, CBD, Warwick) towards the northern suburb of uMhlanga, as well as other suburbs elsewhere in the City. This datastory will investigate urban economic property trends specifically in central CBD, as well as uMhlanga.
Decentralisation in urban planning refers to the spreading out of activities and populations from a city's central core to its peripheries. While mono-centric cities have a dominant central hub of activities, poly-centric cities feature multiple activity centres. The shift from central to peripheral regions can be influenced by economic expansion and growth, as well as specialisation of economic activity. On the it can also be influenced by economic decline and capital flight; where financial resources and businesses migrate away due to factors like crime and inner-city decay. Effective urban strategies need to consider these dynamics for sustainable development.
Understanding such key changes is crucial as the traditional inner city often determines the growth patterns of a city and serves as a leading indicator for future infrastructure needs. An investigation of the data raises the question of whether uMhlanga may become the primary central business district (CBD) for Durban, or if the City will have two or more primary CBDs going forward. The aspects that will be covered to explore this include:
It is worth noting that the same decentralisation trend described has been followed by South African CBDs, as well as other cities worldwide. This trend could be to factors such as growth, specialisation, inner city decay, or economic decline. Historically, cities both globally and in South Africa have experienced capital flight and the growth of selected economic activity away from the inner city, or away from the concentration of professional commercial activity in one node. For example, Wagner (1992) notes how as far back as the 1850s, cities in Britain and America underwent class-selective migration, with the rich moving to suburbs, while corporate and industrial activity as well as slums remained in the central districts. Bremner (2000) in "Reinventing the Johannesburg inner city" explicitly highlights Johannesburg's transformation in the 1990s due to the flight of corporate capital, as well as attempts by city government to address this. More recently, Bhattacharjee and Sharma (2023), in “Polycentric Urbanism and the Growth of New Economic Hubs in Mumbai, India”, discuss how Mumbai’s once-celebrated CBD is now overshadowed by rising economic centres in its suburbs, transforming the city into a globally recognised polycentric metropolis. Articles such as these collectively underscore a global trend of economic activity decentralising away from traditional inner cities, and further into traditional suburbia.
Rentable office space data from the South African Property Owners Association (SAPOA) suggests that there is a greater demand for office space in uMhlanga than Durban Central CBD, despite the latter having more office space than uMhlanga (2012-2022). The most recent figures show that uMhlanga had 500,511m2 of office space in 2022 available which is a huge increase from 273 068 m2 in 2012. Rentable office space in uMhlanga grew by 227,443 m2 and this represents an increase of 83%. On the contrary, Durban Central CBD grew from 738,185 m2 in 2012 to 782,309 m2 in 2022. This represents an increase of 44,124m2 in extent and only a 6% increase. This clearly indicates that the demand for office space in uMhlanga is greater than for Durban Central CBD as the figures for uMhlanga have almost double dover 10 years.
The office vacancy rate is the percentage of built-up office space that is currently unoccupied or available for rent. The vacancy rate for uMhlanga has not exceeded 10.5% over a period of 10 years, while in Durban Central CBD this has remained at just under 20% on average, over the same period. Further to this, in 2022, the vacancy rate for Durban Central CBD worsened to 23% while uMhlanga showed signs of improvement at 9% for the same year. In 2023, Durban Central CBD had a vacancy rate of 23% in Q2 whilst uMhlanga had 6%. This means that almost one in four offices in the central CBD have remained empty, at a time when many people have returned to office based work. Moreover, the increasing number of dilapidated buildings, verified problem buildings in Durban Central CBD, along with higher crime rates, act as deterrents for businesses considering operating in the area.
In contrast, uMhlanga entices investors with its attractive surroundings, enhanced security, newer facilities, and ample parking options. The strong attractiveness of uMhlanga as an office space location presents a notable shift in business preferences within the region.
The same data trends also suggest that the marked absence of A- and Premium-grade offices in the CBD has also induced big businesses to relocate. (SAPOA ranks office spaces according to their aesthetic, the material used to build them, and their facilities. According to SAPOA, A and premium grade office buildings are characterised by prestige lobbies with attractive views, undercover parking, high-tech-friendly, quality access, good security and environmentally friendly attributes).
Business and commercial property data from the eThekwini Municipal Valuation Roll (2008-2022) shows that the Durban Central CBD only had 382 new properties in this period with a total value of R26.7bn whilst uMhlanga had 970, with a total value of R20.8bn over the same period. This shows an increase of 86% for Durban Central CBD and 266% for uMhlanga.
In addition, the number of new business and commercial properties in uMhlanga are almost three times that of Durban Central CBD. This further suggests a shift in business preferences towards uMhlanga.
Whilst data may suggest an increase in demand for office space in uMhlanga, the Durban CBD is still vital for job creation in Durban. Spatial Economic Activity data from SARS shows that Durban Central CBD has significantly more formal FTE jobs and firms than uMhlanga. In 2022, Durban Central CBD had 381,611 formal Full-Time Equivalent (FTE) jobs and 10,825 firms. Meanwhile, uMhlanga had 110,490 formal FTE jobs (3 and a half times less than Durban Central CBD) and 4,699 firms. In 2021, Durban Central CBD had 155,736 formal FTE jobs and 4,546 firms. uMhlanga only had 36,637 formal FTE jobs and 1711 firms. This pattern goes as far back as 2014 when Durban Central CBD had 167,243 formal FTE jobs and 3,924 firms whilst uMhlanga had 21,083 formal formal FTE jobs and 1,095 firms. Interestingly, this also shows that at a compounded annualised rate, jobs in uMhlanga have been growing at double the rate of Durban Central CBD jobs every year, at 9.92% for the Durban Central CBD versus 20.28% for uMhlanga.
While this is the case, the Durban Central CBD still has more jobs per firm at 35 formal FTEs per firm versus 24 formal FTEs per firm in uMhlanga; supporting the role of Durban Central CBD as Durban's primary employment and business node.
The Durban CBD is rebounding, problem buildings that contravene municipal by-laws within the city have been identified and the Municipality is in talks with the owners to have these buildings refurbished or redeveloped. Since 2019, a total of 8 buildings have been demolished and 3 more are set to be demolished this year. Plans are in place for the sites after demolition whereby owners will be provided with incentives to assist with redevelopment should the owner opt for this.
Furthermore, there are additional projects underway in Durban Central CBD, which will create more jobs. Projects such as the Durban Film City and the creation of a logistics hub at the Harbour. The Durban Film City is a private led investment with a value of R 7.5bn. The establishment of the Film City will result in 11,000 jobs created in Durban Central CBD. In addition, a logistics hub is set to be established at the Durban Harbour at Point. The logistics hub has an investment value of R 6.5bn and project forms part of the City’s efforts aimed at reviving the inner city.
In summary, property trends indicate a shift away from Durban Central CBD towards uMhlanga. Rentable office space in uMhlanga has almost doubled in 10 years, suggesting higher levels of demand compared to Durban Central CBD. The lower office vacancy rates in uMhlanga further support this statement. However, Durban Central CBD is still a significant role player when it comes to job creation and firm numbers as these figures are higher for Durban Central CBD than for uMhlanga.
You can access more information on property trends by viewing various dashboards and datasets on the Durban EDGE portal: