Business Day Reporter

MUCH-needed industrial space is at last coming onto KwaZulu-Natal’s market, but prices are skyrocketing in line with national trends, says JHI Real Estate.

“We applaud new developments that are coming on stream as it will ease the huge demand built up over the dramatic stock shortage,” says Alan Dryburgh, industrial broker manager for JHI Real Estate.

But Dryburgh says it remains to be seen whether the market will be able to absorb the sort of rentals being mooted by some developers.

He says new stock is available at R39m² to R43m² (excluding value added tax) and could go as high as R49m² by year-end.

Dryburgh says much of the increase in rentals is due to rising building costs, which are at unprecedented levels. He says statistics show that building costs, including building materials, labour, fuel and contractor profit margin, have risen 85% in the past six years.

“This, combined with land shortages, has accelerated prices.” He says it is a “particularly positive” time for landlords who are likely to see real rental growth due to stock shortages.