Southern Sun secures 50-year lease for Durban’s iconic hotels

The Mayor of Ethekwini Cyril Xaba has confirmed that the Elangeni and Maharani hotels will remain with the Southern Sun Group under a new 50-year lease, including a R1-billion refurbishment of four beachfront hotels.

The current lease expires at the end of next year.

The long-awaited announcement has been described by the City as a major breakthrough. The Mayor says the new 50-year lease includes R1-billion refurbishment of not only the Elangeni and Maharani, but also the Garden Court South Beach and the Edward hotels on the beachfront.

The group will now take over the redevelopment of Elangeni and Maharani Towers hotels in Durban for the next 50 years.

Xaba says the Southern Sun group’s bid was successful since it’s a Level 1 BBBEE company with 59% black ownership, 37% female and 7.4% black youth ownership.

“We are pleased to announce that the Ethekwini municipality has appointed Southern Sun Hotel as a preferred bidder for a long-term leasing agreement and the development of these properties for a period of 50 years. With over 50 years of experience, expertise, and the hospitality sector and the extensive collections of over 90 hotels and resorts, Southern Sun Hotel Interests is ideally positioned to spearhead the re-development.”

The investment will retain more than 400 jobs and create more than 200 additional jobs.

Xaba elaborates, “They will invest over a billion rands, and to me, it’s consistent with business confidence that is rising and it also concise with the opening of another hotel not far from Hilton. It’s a testimony to the statement that we always make that Durban is open for business.”

The rental fee, which has been a thorny issue for years, has now been resolved.

Southern Sun CEO Marcel Von Aulock says they will now pay almost R43 million per year.

“We have got 734 rooms, we have multiple conference spaces and this allows us the certainty to invest in the building, modernisation of the building, bathrooms, corridors, creating new spaces, conferences need to be renovated. So, we are absolutely delighted that we have certainty that we have got a long lease because we can’t do this on a short-term basis because it is a large capital investment. There was a minimum rental that was required, I think it’s almost R43 million per year to be paid to the city.”

Von Aulock has also urged the municipality to implement by-laws to root out criminal activities in the CBD.

“The problems of Durban are not hard to fix. It’s basically infrastructure, managing crime, managing dilapidating. It keeping it clean, keeping it safe, and enforcing by-laws in public drinking all sorts of things. I am confident that it is gonna work.”