The latest statistics provided in a review by Baker Street Properties, show that there has been increased activity in industrial property in the Greater Cape Town area over the past 6 months, with newer nodes such as Rivergate and Atlantic Hills, which are both situated beyond Montague Gardens on the N7, proving popular.
Lloyd Nussey, a director of Baker Street Properties says that developments are available, with owners situated in various nodes in greater Cape Town. "Architects plans have been drafted already and owners are wanting to push the button in areas that include: The Airport precinct, Parow, Bellville, Blackheath, Kuils River, Brackengate, Montague Gardens, Atlantic Hills, Rivergate, Sheffield, Capricorn Park and Somerset West. Some developments offer up to 20,000m2 under one roof and others make available premises for smaller owner occupiers," adds Nussey.
Nussey continues, "We have seen a reduction in warehouse workshop space by 28,003m2 or 6.94% overall since March 2014. During this period vacancies in properties less than 500m2 decreased by 11.05% overall, however the smaller operators are still being directly affected by the current economy.
"In the next category of space from 500m2 to 1000m2 there has been a vacancy increase of 7.32% overall. Premises greater than 1000m2 in size have decreased by 9.08% overall. Average rentals across the board are at R40/m2 and escalations are unchanged at 8%pa."
Nussey explains that numerous developments have taken place during the period under review, the most prominent being Airport City, Epping 1 and 2, Brackengate, Montague Gardens (where a spec. build of 20,000m2 has already been let), Blackheath, N'Dabeni, Saxdowns and Joostenburg Vlakte. This has meant a greater and more efficient take up of space, with larger logistics companies in particular positioning themselves for expected growth now and in the future.
"Many of the tenants have moved from previous buildings which are older. Other reasons for relocating include: premises not having the right height for delivery/logistics vehicles; lack of good inter-link access; premises spread over a broader area with multi-buildings, which became difficult to manage. Finally, good internal and external security has always been a major reason for moving and upgrading.
"We have noted that industrial land which is properly zoned in good locations with reliable security is increasing in price. Our research has also shown that the industrial market has been active in the past 6 months and all signs point to this trend continuing going forward," concludes Nussey.
