Real Estate Investor Magazine South Africa April 2016 | Page 38

TRENDS

Evolution of Industrial Properties
Industrial properties evolve with economic challenges
BY DREW HOOK

S

mart operating spaces with smaller floor areas,
but larger volume, will define the industrial
property market in South Africa in 2016.
This will be driven by the consolidation of operations
as industrial businesses remain under pressure, the
immense impact of the Eskom electricity crisis on
the industrial sector and continuing increasing energy
prices, as well as supply dynamics of industrial space
in certain areas.
“The failure of major retailer Ellerines has not only
resulted in the failure of retail tenancies at shopping
centres, but also the failure of tenancies at distribution
centres, yet, while sentiment remains quite negative
when it comes to economy, manufacturing output
data is showing movement towards positive territory,
which is good news for industrial property,” says
Engelbert Binedell, Growthpoint Industrial Property
Divisional Director.
Industries are working differently and innovating
to adapt to the present set of challenges. “Industrial

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APRIL 2016 SA Real Estate Investor

concerns are operating smarter to ensure their
sustainability. This is also resulting in their property
needs evolving and a new set of desirable specifications
to match,” he adds.

Manufacturing output data is
showing movement towards positive
territory, which is good news for
industrial property
Industrial companies change their behaviours to
create new ways of streamlining their businesses, like
working at off-peak times to benefit from off-peak
tariff savings. Industrial businesses are consolidating
their operations onto single sites, and seeking
buildings with smaller footprints but greater volume
from increased height.
Established industrial nodes in Durban include
Prospecton, Jacobs and Mobeni in the South,
www.reimag.co.za