SOUTH AFRICA – Southern Sun Limited, a multinational hospitality company, has secured a 50-year lease for two prime properties on the Durban beachfront, which houses its 734-room Southern Sun Elangeni & Maharani hotel.
The deal with landowners, the eThekwini Metro, will see around ZAR1 billion (US$58.08m) invested over the next few years in the hotel and other properties in the area run by the JSE-listed group.
The municipality confirmed the decision at a briefing at the Sky venue on the hotel’s 31st floor.
“The redevelopment entails an estimated capital investment of ZAR1 billion (US$58.08m), including the refurbishment of the Elangeni and Maharani hotels as well as the Garden Court South Beach and The Edward hotels which are also owned by Southern Sun,” eThekwini said in a statement.
“In addition, a fund of ZAR5 million (US$290,408) will be made available to restore and maintain the Sunken Gardens, a historically significant park owned by the municipality on the beachfront in front of the hotels,” it added.
The 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.
Southern Sun is SA’s largest hotel group, with over 90 hotels, four of which are on the Durban beachfront.
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”.
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 (US$12.77m) to revamp the hotels and combine them into one operation, with over 700 rooms under the Southern Sun Elangeni & Maharani hotel.
However, the hotel is located on two property ERFs virtually next to each other in the North Beach area of the Durban beachfront promenade.
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