Demand for Durban business space boosted by call centres and tourism

By Suren Naidoo

Demand for business space on KwaZulu-Natal’s north Durban corridor is being boosted by the growth of the call centre and tourism industries, according to Xoli Shabalala, Tongaat Hulett Developments’ Head of Market Solutions.

Shabalala said in a statement this week, that the availability of affordable space is one of the reasons Durban and KwaZulu-Natal have become hotspots for locating call centres. She added that the province’s tourism sector was being boosted by passenger growth out of King Shaka International Airport at the Dube Trade Port SEZ and new hotel developments in Durban and its northern growth corridor.

Xoli Shabalala, Head of Market Solutions at Tongaat Hulett Developments.

“Affordable commercial space is a major advantage that we have over other centres in SA, and it is one that we are looking to build on by establishing BPO Parks that could host a number of facilities in one location. We have only recently completed our research into the market demand for the concept and are confident that the idea has great merit,” said Shabalala.

According to Tongaat Hulett Developments, KwaZulu-Natal is home to more than 60 Business Process Outsourcing (BPO) call centres and accounts for almost 50% of South Africa’s financial services call centres.

Shabalala said: “The BPO sector has been identified as a compelling market sector in the region. Tongaat Hulett is committed to facilitating development to accommodate this demand and open up attractive and profitable investment opportunities. Fortunately, there are a number of such opportunities available in our portfolio right now that can provide specifically tailored solutions to accommodate that demand.”

This will be welcomed by Durban’s 1.6 million labour force which boasts a literacy rate of 84.3%. BPO facilities have a higher staff density and will bring more jobs to the region and thus boost the local economy.

In addition to this comparatively new sector, tourism which is seen as a staple of KwaZulu-Natal’s economy, continues to show growth with demand for more facilities.

Tongaat Hulett said this view is supported by research, which shows that hotels in uMhlanga alone represent 28% of the province’s hotel market, with occupancies, rates and revenue per available room having outperformed the national market for the past three years. It added that the strong performance is linked in part to growing business travel, but also the proximity to King Shaka International Airport.

An artist’s impression of the R1.3 billion uMhlanga Arch mixed-use development in the booming Ridgeside node, which will include an international premium-brand hotel.

Shabalala said: “Interest from hotel operators is evident all over uMhlanga, with a spate of new hotels opening in the next year or two. The likes of the Radisson Blu Hotel, the Marriott uMhlanga and the proposed premium-brand hotel for the R1.3 billion uMhlanga Arch development demonstrate this interest… We expect this demand to continue into the near future, which is good news all round for Durban’s broader business community.”