SOUTHERN Sun Hotel Interest has been appointed as the preferred bidder for the long-term leasing and redevelopment of the Elangeni and Maharani hotels for the next 50 years. Southern Sun’s current lease expires at the end of December 2025.
Making the announcement, eThekwini Mayor, Cyril Xaba outlined an investment of over R1 billion that the Southern Sun Hotel Interest has committed to its hotels and the Durban beachfront.
This includes:
- R622 million on the Elangeni and Maharani,
- R157 million on movable assets
- R348 million on hotels owned by the same entity. This investment is in line with a functionality requirement that required bidders to further invest in the Durban beachfront precinct and stipulate where the investment will be made.
- Bidders not owning a property on the beachfront could identify a municipal infrastructure asset that they will renovate or upgrade. The Southern Sun Hotels Interest has committed to an additional R5 million to be invested in the Sunken Garden which is a municipal park opposite the Elangeni and Maharani.
A capital investment of over R226 million will be made into the Maharani Tower to incorporate and maintain the five-star elements of the overall complex.
This will be achieved through the following developments:
- Upgrade of the lobby.
- Enhancement of the second-floor level.
- Full refurbishment of the suites which will bring a five-star element back to the Durban Beachfront.
- A rooftop pool bar which has some of the best views in Durban.
In the Elangeni Tower, the capital investment is R354 million which includes the modernisation of the lobby and refurbishment of the bedrooms and the introduction of a new restaurant concept.
Southern Sun will also invest R348 million in the other two hotels owned by the group on the beachfront, namely the Garden Court South Beach and The Edward Hotel.
Sustainability
Mayor Xaba said the redevelopment also brings innovative solutions that promote sustainability and minimise adverse environmental impact. Substantiality solutions to be introduced include renewable energy in the form of a solar panel installation and a water reuse system which will produce around 15 ML per annum.
Employment
Xaba said, “As a City, we are delighted that this development will retain and create more job opportunities. For instance, Elangeni and Maharani currently employ 454 people who are going to be retained. A further 200 jobs will be created during the refurbishment phase which is expected to last for a period of 36 months.
He also said that the city is finalising supply chain management processes for the other 6 beachfront properties including Joe Kools, The Deck and the old “Funworld Site”, with a combined capital investment value of R440 million. He said an announcement will be made before the end of the 2024 calendar year.
Background
The Mayor said the announcement of the preferred bidder follows a process of the issuing of the request for proposals from industry issued in November last year in line with the municipality’s Proactive Land Release Strategy.
“With over 50 years of expertise in the hospitality sector and an extensive collection of over 90 hotels and resorts in South Africa, the rest of Africa, the Seychelles and Middle East, Southern Sun Hotel Interest is ideally positioned to spearhead the redevelopment and operation of these properties.
“The fact that the Southern Sun is a Level 1 B-BBEE South African registered company, which is 59,9% black-owned, 37.2% black women-owned, and 7,4% black youth-owned, underscores the Municipality’s commitment to transformation.
“It also demonstrates our steadfastness to use the city’s property portfolio to promote economic transformation in the property sector in order to enable meaningful participation of those who were deliberately excluded in the past.
“Furthermore, this is in compliance with Section 25 (5) of the Constitution which places a mandatory requirement on the state to take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis,” said Xaba.
