More office, bank space growth

2008-01-23 00:00

Industrial and shopping space across KwaZulu-Natal expanded impressively between 2001 and 2006 and now office and banking space expansions are likely to accelerate further in the medium term.

According to Clive Coetzee, local economist at the University of KwaZulu-Natal, industrial growth has been particularly impressive over this period.

Analysis of Coetzee’s research, which covers office and banking, industrial and warehousing and shopping expansions between 2001 and 2006, reveals that the province has performed exceptionally in all three development types, particularly in industrial and warehousing expansions and in new developments.

Interestingly, Coetzee has picked up a noteworthy trend related to the dominance of industrial and warehousing developments over other types of developments (that is, shopping and office and banking) between 2001 and 2006.

"For every 30 m2 of industrial expansion or new industrial development, office and banking has increased by about 10 m2, while shopping space has also increased by about 10 m2."

Thus, industrial expansions and new industrial developments have remained healthy catalysts for growth in other sectors, ensuring healthy economic growth and development for KZN.

"The geographical attributes of KZN played a major role in industrial expansions; with our transport and logistics infrastructure, with two harbours and the N3 route being major strengths," he told The Witness.

"Industrial activities generate income, wealth and economic activity. We have not yet reached capacity in terms of office and banking space in KZN.

"We are still relatively under-serviced. In terms of shopping however, we have just about reached capacity for now.

"Higher interest rates and higher inflation will also play a role in this regard. There will be less expansion and new development on the industrial side.

"It [industrial] comes off a high base and the uncertain and nervous socio-political environment, as well as electricity problems will contribute to this moderation."

Coetzee explained that, while significant amounts of money have been invested in expanding existing industrial and shopping space, the impressive growth also shows that companies have been building new infrastructure (new factories and shopping centres and so on).

The average annual building and construction inflation for office and banking expansions and new developments between 2001 and 2006 in KZN came in at 15% (Pietermaritzburg at 22%).

The average annual building and construction inflation in relation to shopping expansions and new developments for the five-year period in KZN was 30% (Pietermaritzburg 27%).

Furthermore, the average annual building and construction inflation for industrial expansions and new industrial developments for the same period in KZN was 27% (Pietermaritzburg 37%).

Inflation intensified between 2004 and 2006, when compared with the 2001 to 2003 period.

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