At the opening of the new Lion Match Company office are Mr NM (Gora) Ismail Abdoola, company Chairman, flanked by Ajith Heeralal, Group Financial Director (left) and right Basie Van Wyk, Group CEO.
Holding the famous Lion Matches at the opening of the new Lion Match Company office in Durban on Saturday 20 February 2016 are Mr NM (Gora) Ismail Abdoola Chairman, (centre) with left Ajith Heeralal, Group Financial Director and right Basie Van Wyk, Group CEO
Point naysayers will have their say and they do. Actually, they’re quite entitled to scoff at the Point. Newspapers have been replete with headlines knocking the Point and the government’s repeated blunders there. Favourites include: “The Point of No Return” and “What’s the Point?” or snappy variations of that theme.
Many point to the latest plans for Malaysian investment as the area’s saving grace. Artist impressions of glass fronted sky scrapers inspire wonder in some Durban residents and horror in others. What’s most interesting about the Point, when you strip away the marketing rah-rah, is that it’s a great destination and, for many owners there, a great investment.
In February, the Lion Match Company joined a host of others that have invested significantly in the Point. Lion has put R80 million into a new head office at the Point, on the corner of Mahatma Gandhi and Signal Roads. The 10 000m2 mixed use building includes warehouse, corporate offices and covered parking.
It is fronted by the company’s iconic golden lion and has been designed to blend with its portside location, boasting floor to ceiling glass windows with magnificent views of South Africa’s biggest and busiest harbour. At the opening, Lion Match chairman Gora Abdoola said his company had a 98 % share of South Africa’s safety match market and was also active in the fast moving consumer goods space with well-known brands such as Duel, Loving Touch, Cherubs and Comfitex amongst others.
“We believe that Durban has a proud heritage. We bought The Lion Match Company because of its Durban base, so it didn’t make sense for us to move out of Durban,” he said. The Fasic Investment Company, which has 520 shareholders from previously disadvantaged communities, bought The Lion Match Company from South African Breweries in 2001. It relocated its match manufacturing plant from the landmark Lion Match Factory in Umgeni Road to its factory in Rosslyn, Pretoria, when its location close to residential areas was no longer appropriate for health and safety reasons.
Abdoola said The Lion Match Company had seen turnover grow from R200 million at the time of the acquisition to R1,5 billion this year. He said locating the company’s headquarters strategically on the Durban Point was iconic, adding that it would act as a catalyst for other major Durban companies to base themselves there. Lion is not the only significant company to be based at the Point. Ithala recently moved its head office into a building it owns there, bringing 300 office workers into the area.
Tourism KZN is located in the same building and has added to the energy there. Point property owner and commercial real estate broker Herman Chalupsky has been a long-time advocate of the Point. He believes that if you look past the political football that the Point has become, it has steadily increased in value.
“It has always been value for money. If you can find property at the Point, you should buy it, but nobody’s selling. At the moment the cranes are here. There is a 4500 m² development going up around the corner from my office. There is a residential block with 72 units going up. It is happening. You only have to come here to see.” Chalupsky says the area is happening regardless of the Malaysian investment. Although, the Malaysian involvement means people aren’t selling because they expect to see the value of their investments in the Point increase.
“I spoke to a Canadian restaurateur recently,” Chalupsky said. “He wants to establish a restaurant at the Point because he says it is world class. And he wants to buy. He says it is an obvious proposition. It is scenic, it is surrounded by water and there is only one road in and one road out.”
Chalupsky says offices are selling for between R15 000 to R18 000 per m²depending on the offering. While he doesn’t claim to be a residential expert, Chalupsky said he was aware of residential selling for upwards of R22 000/m². That is much cheaper than Umhlanga, for a similar seaside offering.
Miles Taylor, Standard Bank head of real estate finance in KZN, said that while the Point approval and planning issues had dragged on for years, the area was still value for money compared with others.
“If the prices are below the R30 000 or R40 000/m² being achieved in Umhlanga, the question people ask is: do I pay less for the Point, but where there are outstanding issues or do I pay premium in Umhlanga, knowing area management is sorted with the Urban Improvement District?
“What I often hear spoken about is around the entry/exit points to the Point, around Winder Street. There are a number of derelict buildings which perceptually and psychologically detract from the overall Point offering.” Twelve years ago, eThekwini municipality revitalized the Point precinct and spent R735 million on uShaka Marine World and then millions more on the infrastructure for the new residential area with canals running through it.
This prompted private investors to plough billions into the precinct. Last year an analysis of Point prices, based on information from property data company Lightstone, was revealing. Lightstone said there had been 175 residential property transfers at the Point since 2010. There were 42 in 2010 and 22 in 2014. The average price paid per square metre increased from R14 560 to R26 420 in that period.
By comparison, in Durban North in the same period there were 619 transfers with the average price rising from R8610 to R10 490. In Umhlanga there were 2936 transfers and the average price paid in 2014 ranged from R21 000 to R27 000 per square metre. Although, prices have since risen significantly in Umhlanga.