KwaDukuza remains one of South Africa’s more expensive municipalities for commercial property development, despite continuing to rank among the country’s fastest-growing economic hubs.

This is according to the Competitiveness of the KwaDukuza Commercial Property Sector 2026 report, commissioned by the iLembe Chamber of Commerce, Industry and Tourism and the Ballito Business Park Lot Owners Association.

The study compared development and operating costs in KwaDukuza with those in eThekwini, Mbombela and Stellenbosch and found that municipal charges remain a significant factor influencing investment decisions.

Researchers noted that KwaDukuza recorded the highest population growth rate among the municipalities studied at 3.5%, while its economy continued to expand despite having a smaller economic base than larger metropolitan areas.

However, the report found that commercial developments in KwaDukuza face some of the highest municipal costs in the country.

For retail developments, once-off municipal development costs exceeded R913 000, compared with about R754 000 in eThekwini, R562 000 in Mbombela and R771 000 in Stellenbosch. Office developments also ranked among the most expensive, while industrial and logistics projects faced development costs of more than R350 000.

The report found that recurring operational costs pose an even greater challenge for investors. Annual municipal charges for retail developments were estimated at more than R1.23 million, while office and industrial developments could face annual costs exceeding R1.8 million.

Property rates and electricity charges were identified as the primary cost drivers across all development categories.

Researchers noted that property rates have increased significantly since a similar study was conducted in 2022. KwaDukuza’s rate randage increased from 0.02549 to 0.029929, while operating expenditure has consistently grown above inflation in recent years.

The report warns that rising tariffs and service charges could affect the municipality’s long-term competitiveness if not carefully managed.

Despite these concerns, KwaDukuza continues to benefit from strong population growth, expanding commercial activity and ongoing development.

Among the municipalities assessed, Stellenbosch and Mbombela emerged as the most cost-competitive locations for commercial property development, while KwaDukuza and eThekwini ranked among the highest-cost jurisdictions.

The full report is available on the iLembe Chamber website at ilembechamber.co.za.