Real Estate Investor Magazine July/ Aug 2020 July 2020 | Page 40

INDUSTRIAL
An unexpected outlier
Industrial real estate is in
high demand, here’s why
CLINT MARAIS
The economic and social impacts of the COVID-19 pandemic
have hit the real estate industry hard, resulting in an
industry-wide slowdown. However, in the midst of this, there
has been a surprise uptake in a sector that few in the industry
could have predicted: industrial real estate.
S
ince the beginning of Level 3, key industry players like
Clint Marais Regional Head of Galetti Corporate Real
Estate Western Cape, have noticed a positive upturn
in the sector which can be attributed to both the stringent
hygiene measures now required in the workplace and the
changing nature of retail in the time of COVID-19.
the massive consumer demand once the wearing of PPE
outside of the home was mandated by law”.
According to a recent study, e-commerce fulfilment
requires more than three times the space of its predecessor,
traditional retail sales.
The commercial real estate industry has welcomed a
positive upturn since level 3 of lockdown. One particular
sector that is making waves and has seen a noticeable spike
in activity over this period is undoubtedly industrial real
estate.
Why the Move to Industrial Real Estate?
“This uptake can be attributed to the both the stringent
hygiene measures now required in the workplace and the
changing nature of retail,” says Galetti Corporate Real Estate
Western Cape Regional Head, Clint Marais.
“Many businesses have wisely capitalised on the
increased reliance on e-commerce from consumers who are
choosing to do their shopping from home, by discarding
brick and mortar storefronts in favour of virtual ones.
Other businesses have pivoted to focus on manufacturing
Personal Protection Equipment (PPE), wisely anticipating
Marais notes that both e-commerce retailers and PPE
manufacturers require distribution centres and makes
special menion of two recent independent requests from
large pharmaceutical businesses, looking for significant
distribution centres in the country’s major port metropoles.
“While it is clear that the logistics and warehousing
sectors are forging ahead, we predict that the real impact of
COVID-19 on the manufacturing sector will only be seen in
the coming months,” he says.
“Adding to the demand is the fluctuation of exports
and the depreciation of the Rand. Here, manufacturers are
scaling up local production to mitigate the possibility of
disrupted supply chains in future”.
Key Areas for Industrial Property
Investment
Marais predicts a major uptake in recently developed
36 JULY/AUGUST 2020 SA Real Estate Investor Magazine