Five-star Radisson Hotel debuts at Oceans Umhlanga mega development

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07-06-2022
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Moneyweb
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Reddy, who is leading the ambitious R4bn mixed-use property project with JV partner Rob Alexander, speaks about the new hotel and gives an update on the overall development, which will include a luxury mall, supercar showroom and two residential towers.

The R1 billion Radisson Blu hotel tower opened in Durban on Friday as part of the first phase of the multi-billion-rand Oceans Umhlanga mega development, which is being led by KwaZulu-Natal tycoons Vivian Reddy and Rob Alexander.

At 28 storeys, the building is the latest high-rise in Umhlanga Rocks and houses the five-star hotel and around 90 apartments above it. The hotel tower is an important component of the overall property project, with other elements including a 36 000m2 luxury mall, supercar showroom and two residential towers.

Despite delays due to SA’s construction sector woes and then the Covid-19 pandemic, Reddy says the R4 billion-plus Oceans Umhlanga project is forging ahead as one of largest mixed-use developments in SA.

Besides the new hotel, Oceans Mall is set to open in October this year, while construction will recommence soon on the two high-rise apartment blocks.

In this latest episode of The Property Pod, Reddy gives the lowdown on the new Radisson, which is the first internationally-branded five-star hotel to open in Durban since the Hilton Hotel (next to the ICC) in 1997.

Reddy, who owns Edison Power Corporation and has gaming interests through Afrisun KZN (the empowerment partner of Sun International in the Sibaya Casino complex), also gives an update on the broader Oceans Umhlanga project. 

He reveals that the Public Investment Corporation [PIC] is now a shareholder in the commercial property side of the development. Reddy also talks about why the Snow Park plan at Ocean Mall has been shelved and gives insights on some of the other property ventures he has up his sleeve.

Highlights

“We are just out of a very successful opening function and we are looking forward to the Radisson Blu being the first in KZN … [It’s] a 207-key hotel; the towers cost us R1 billion, and all indications are that the position and the quality of the product is going to make this a world-class offering.”

“The project is R4.5 billion, one of the biggest mixed-use developments here in South Africa. In fact, to even start the project we bought this massive piece of land, the last piece of available land. We had to remove a country club, we had to relocate a Telkom [service centre], a post office, the main water pipe for Umhlanga, the Vodacom exchange, plus the council offices and [had to] remove 45 000 truckloads of sand.

“The project consists of a 36 000 square metre mall, the hotel and another 500 apartments. The project is actually going ahead. We’ve had issues in the past where contractors, two of them, went [down] – one went into liquidation, one into business rescue, and there were problems getting another contractor accepted.”

Covid and KZN riots

“Then we had all the problems of Covid, and we had the uprising in KwaZulu-Natal that caused delays. But, despite all that, we are going ahead, we never give up. We’re moving ahead. The hotel has been opened. The mall itself – a R1.3 billion mall – which is very high-end … [will have] our own Diamond Walk with all the international brands.”

“We’ve got the likes of Checkers and Woolworths anchoring it … The mall is already 95% let. And we’ve got some of the best restaurants in South Africa, like Signature in the mall. We’re bringing a whole level of excitement to Umhlanga Rocks.”

Tell us more about the new hotel?

“Radisson Blu is the second-largest hotel group in the world [1 600 hotels]. They have 65 hotels in the whole of Africa. We thought it was the ideal fix, and they themselves are very excited. They [didn’t] have a presence in KwaZulu-Natal and the Chinese now own the Radisson brand …”

“So the Radisson fit is ideal for Umhlanga Rocks, but more important is the location of the site. It is going to be linked to the mall, and it’s only three minutes’ walk to the ocean.”

“[Besides the 207 hotel rooms] we’ve got 95 suites. We are calling them the Radisson Hotel Suites for long-term buyers. Some people have bought [these] and they’ll be putting it into a rental pool, but it’s for long-term usage. But the real top secret that we’ve kept, is that on the 28th floor of the hotel and the hotel apartments are going to be two 600m2 presidential suites, the biggest presidential suites here [in KZN], overlooking the whole of Umhlanga Rocks in Durban.

“[These] are going to be very expensive suite[s]. But we think, given experiences like [at] the Oyster Box Hotel and the Beverly Hills Hotel – our competitors – and the rate at which they sell the presidential suites, there is a big demand. We are very, very excited about that.”

“The hotel [itself] cost us R650 million. There are 207 keys [rooms]. It has a conference venue for 600 people … We also have the FireLake restaurant with a massive pool area …”

“It was already built. The focus is going to be on weddings because weddings are very big. I’m involved with Sibaya Casino [and] we are booked out two years on for weddings. So we are turning that [Radisson’s conference section] into an exciting wedding venue, and we’ve already got 30 bookings since our opening.”

What about Oceans Mall and the Snow Park that was planned there?

“We originally planned for a snow park, but when Covid hit we replanned the whole snow park. That area for the snow park is now going to be a big entertainment area. We just thought that it’s going to be a long time before people start with snow, and if Covid comes again [there’s] I think the whole fear of people interacting too closely.”

“Now on the international brands, I’m not at liberty to tell you all the names of the brands as yet. But what I could say is that, if you look at Diamond Walk in Sandton City, we’ve got 80% of all the shops that are in Diamond Walk in the Oceans project.”

“Checkers is going to have one of the best-quality Checkers [stores]. I keep teasing the chief operating officer of Checkers, and I told him that nothing less than a replica of Harrod’s will go in Umhlanga Rocks. He didn’t say no, and I know they’re spending a lot of money.”

“We think that we’ve created a very exclusive mall for a very high LSM area out here. It’s a place where people are going to come and enjoy themselves with restaurants [and] clothing [stores]. And we also believe we’ll have a big offshoot from the hotel. As you see what’s happened in Sandton City … with the hotels being part of the shopping mall, it’s a winner.”

“When the CEO of the company flew in from Italy, [he was] very, very excited about it. And so imagine you come down Umhlanga Rocks Drive – you’ve got this beautiful supercar showroom, you’ve got all these high-end brands, you’ve got the FireLake restaurant, you got the beautiful Radisson Hotel. It has all the ingredients, and should be a successful place to visit.”

What about the other two luxury residential towers as part of the broader Oceans Umhlanga development? Are these still part of the plans? 

“[These are] called the Oceans north tower and the Oceans south tower. We’ve had great interest and already we are 70% sold … That is due to commence [recommence construction] by mid-June and it’ll finish in December next year.”

“What we are going to do is keep about 200 units for rental, because the rental stock is in big demand in Umhlanga Rocks.”

“It’s also a very practical development in that the residents can come straight down and almost walk into a Woolworths or a Checkers store, a pharmacy, and take all their groceries up, back into their apartments. The demand is great. We’re selling about 10 apartments every week.”

“[There are] 250 [apartments] per tower with a common pool area and a common entry. Security is a very big issue in South Africa today and we’ve got state-of-the-art security for these units, including the entire mall.

“We’ve got lots of jewellery shops in the mall, and some of the best watch manufacturers are going to be there. So we’ve taken security to an entire other level in this mall with the residential and the hotel [aspects].”

Partners on the development

“Initially it started off – and your memory is absolutely amazing Suren – there was Southern Palace Investments, the company where I was a minority shareholder. That started about 11 years ago. And then Rob Alexander, a well-known property developer from Pietermaritzburg, and I got together and decided to buy this piece of land. Originally, we were going to service it and on-sell it.

“Then I had this idea and said ‘Let’s create an iconic project’. Rob’s very involved with lots of projects, he is well known in the property industry, and in development.”

“Rob and I have a wonderful relationship, and everything’s going extremely well. I’ve become the face of the business and I’m actually leading the development. We’ve got a wonderful team of about 64 individuals involved and we are very, very excited about the outcomes of this project.”
 

“Everyone in Umhlanga Rocks, with the opening of the Radisson Blu, the Oceans, is now in a positive mood. Everyone’s excited and everyone’s waiting for this great mall to open in October.”

What other property projects are up your sleeve?

“Well, what is important for your listeners, this whole Oceans Umhlanga project, [is that] during construction, right up to date, we employed 16 000 people and in permanent jobs [there will be] about 3 500. It’s important to create those jobs.

“And then in our project in KwaDukuza, we are building 300 homes, a 10 000-square-metre Value Centre, and a hotel. KwaDukuza does not have a hotel, and yet it has 500 000 people. We also plan to expand the mall there. All in all, we’ll be spending about another R3 billion in the next two-and-a-half years in the economy, and we’ll be creating something like another 3 000 much-needed jobs for this province.”

“As the opportunities come, we will continue building. I’ve got lots of confidence in this province, I’ve got lot of confidence in this country. We’ve got lots of problems, but we believe as property developers we’ve got to invest and create jobs and continue being positive.”