By Suren Naidoo.
The lucrative leases for one of the largest hotel properties in South Africa came up this year after the eThekwini Municipality decided to offer the sites to the market in the wake of Southern Sun’s leases expected to end next year.
The municipality had an open tender process, which it said it had to undertake as part of its regular supply chain management and land tender rules.
However, the issue hit the headlines last year when it was revealed that the leases for the properties would expire in 2025, which raised concerns that if Southern Sun exited, it could mean the death knell of Durban’s Golden Mile.
Southern Sun is SA’s largest hotel group, with over 90 hotels, four of which are on the Durban beachfront.
Durban Mayor Cyril Xaba said in a statement that he was proud of how the municipality had dealt with the issue of the leases of these important properties and thanked city officials “for their dedication in managing this complex process in line with the various laws and regulations governing the municipality”.
“We wish to also thank Southern Sun for staying the course with our municipality despite the numerous challenges experienced by our province and particularly the hospitality industry over recent years, which includes the Covid-19 pandemic, the devasting floods and July civil unrest,” said Xaba.
Southern Sun has demonstrated its commitment to both transformation and inclusive economic development of this important city asset. We are particularly excited about the significant economic impact and job creation that the redevelopment brings for our city,” he added.
Commenting on the announcement, Southern Sun Group CEO Marcel von Aulock said: “We are delighted that the city has managed and concluded the process for the selection of a preferred bidder for these iconic properties, which are vital to the long-term maintenance and rejuvenation of the Durban Beachfront”.
He added that Southern Sun has a long history of operating on the beachfront.
“The area is very much part of our DNA with some of the best hoteliers South Africa has produced developing their careers at these hotels.”
“We remain committed to seeing Durban unlock its full potential as a premier leisure, conference and sporting destination for South Africa and look forward to working with the eThekwini Municipality to achieve this,” added von Aulock.
Southern Sun — formally part of the broader Tsogo Sun group — has held the leases for the properties since the mid-1970s, when icon hotelier Sol Kerzner built the Elangeni Hotel. The group later took over the development of the neighbouring Maharani Hotel, a 5-star landmark at the time.
In 2013, Southern Sun spent R220 million to revamp the hotels and combine them into one operation, with over 700 rooms under the Southern Sun Elangeni & Maharani hotel. The hotel is, however, located on two property ERFs virtually next to each other in the North Beach area of the Durban beachfront promenade.