COMMERCIAL INVESTING
And while the sector continues to fight against uncontrollable odds such as inflation and interest rate hikes , I believe that the industry has weathered the worst of the storm in the shortterm . It has transformed over the past few years and we are cautiously optimistic about the future .
While high vacancies in the office sector cannot be denied , the logistics property sector is a firm frontrunner and has contributed to a large portion of the sector ’ s growth for 2022 . Demand from the logistics property sector for warehousing and vacant land in industrial areas is leading the way .
Interestingly , there are few vacant industrial premises on offer – particularly in the Western Cape - giving rise to a seller ’ s market . The major uptake in space can be largely attributed to the growth of eCommerce , for example ; Takealot . com has acquired an additional 35000m2 of space and has extended its existing premises by 15000m2 .
Property developers have also noticed the uptick and are cashing in . While developers still welcome the opportunity to develop warehouses for a confirmed tenant , there has been a notable upsurge in the development of speculative warehouses , and developers are filling these successfully prior to completion .
Why Logistics & Why the Western Cape ?
Rode ’ s Report on the South African Property Market for Q3 2022 detailed a nominal rental growth of 5.3 % for spaces of 500m2 ( compared to Q3 2021 ). The report further states that the market was boosted by low vacancies and demand for logistics warehousing .
While there is significant growth and uptake across the country , the Western Cape province has outperformed the rest . With barely any industrial sites on offer , clients are clamouring for space . This creates a unique opportunity for investors and landlords .
44 DECEMBER 2022 / JANUARY 2023 SA Real Estate Investor Magazine