Property values in Durban’s Stamford Hill and Umgeni Roads are set to increase dramatically as low-grade industrial space is converted into up-market office and retail space at an increasing pace.

The latest property to join the trend is the Rio Ridge Building, comprising 17 light industrial properties in Umgeni Road, which has been sold by Billy Latham of JHI Real Estate for R5.6-million.

"The trend whereby tenants take up light industrial space on the fringe of the CBD at a greatly reduced rental and transform the space into hi-tech offices and retail space holds great appeal for a number of users", says Latham.

A case in point is New Frontier Tours & Travel, run by Craig Smith, who previously occupied premises in Cowey Road, where rentals range between R60 to R70 a square metre. The tour company took up the opportunity to lease the only remaining unit in Rio Ridge, together with Mark Garrod who imports and sells Asian pots, and have converted what was standard industrial type accommodation into elegant open-style office accommodation, according to Latham. A clear epoxy has been applied to the floors and retro industrial lights hang from the ceiling. The windows have been sanded and returned to their original state with elegant blinds and afford views of Durban’s northern beaches and railway line. Leather furnishings complete the stylish olde-world setting for this company.

"Ground floor premises facing Umgeni Road are in great demand and any vacancies are quickly taken up," says Latham.

One of the first buildings to provide impetus for change in the Umgeni/Stamford Hill node was House of Lizard at 190 Stamford Hill Road. The property was sold by Alan Dryburgh, JHI broker manager, last year for R6.2-million. Since the conversion from warehousing to retail, rentals have almost doubled from R18 square metre to around R35 per square metre.

Dryburgh says that the stand-alone Mr Price building on the corner of Umgeni and Argyle Roads was another big precursor for change. "The significant value that can be added to a property through converting and refurbishing will provide impetus for landlords to invest in their buildings in the node," says Dryburgh. "We believe that this area is going to take off this year and will consolidate into a destination lifestyle and value shopping node".

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