4 Reasons why investing in a new warehouse makes financial sense

Montague Park Development in Montague Gardens

Successful business owners and companies having to expand their warehousing or manufacturing operations tend to only look at the costs involved when considering brand new industrial property and warehousing space. However, the unique benefits of a newly built property is often not taken into consideration when weighing up the benefits of both old and new buildings.

This is according to industrial property brokers Dylan Pelton and Alexi Pavlou from Baker Street Properties in Cape Town who are of the opinion that business owners need to take the following key benefits into consideration when evaluating a new warehouse/development against an existing building:

1. Less really is more

With increased height offered by most new development structures, companies can now reduce their footprint by utilizing smaller warehousing space which at the same time offering increased capacity. For example, a traditional warehouse of 500 square meters can roughly be translated into a 300 square meter warehouse with increased height, which translates into a considerable monthly saving in terms of both rental and operating costs. This benefit is usually not taken into consideration when companies and business owners start searching for new industrial property.

2. New developments are increasingly positioned on the outskirts of congestion

Montague Park Location

Taking Cape Town as example, almost every new development is situated in a prime location, yet avoids much of the gridlock associated with areas close to the central business district. For example in the Killarney Gardens area, most new developments are positioned close to the N7/R300. Apart from the benefits of increased exposure to motorists along these main arterial routes traveling in and out of Cape Town, these locations make a considerable difference in streamlining operations for logistics companies still being close to main routes but out of the way of major traffic congestion.

3. Energy efficient systems and materials are actually worth the initial investment

“It makes more financial sense to move growing operations into a modern space with better, cleaner and more efficient technologies” according to Pavlou. For example, the Killarney Gardens area is slightly limited in terms of its electricity infrastructure compared to new developments in Montague Gardens. In this case, it would be worthwhile for a growing company to invest in a new development in neighbouring Montague Gardens with not only new infrastructure, but also energy efficient technologies and generating capacity to combat load shedding. Overtime, the work efficiencies along with slashed utility overheads will provide a quicker return on investment than one may think. This of course excludes all the nice to haves such as dock levelers and increased yard space ensuring for better turning circles.

4. Less wasted space on office components

In the olden days, industrial properties were designed with many small enclosed offices. In today’s terms, this can be interpreted as an “oversupply of office space” as most companies prefer an open plan layout for the bulk of their staffing operations with only a few enclosed offices to customize to their particular work dynamic. Most new developments have a 15% office component which offers great flexibility and reduced wastage of space which makes more investment sense.

To view more information on our latest new development in Montague Park, click here

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