Latest Report: Cape Town Industrial Property Market Continues To Grow

Industrial Report

The industrial property market in Cape Town continues to show positive growth trends and increased activity. This is according to our latest market report compiled by industrial property director Lloyd Nussey, reporting that “there is a continued increase in industrial activity throughout the greater Cape Town area compared to the previous report”.

Read the summary below

  1. The industrial property market in Cape Town shows the following changes in key indicators:

  • Average gross rental: increase to R46m2 (up from R42 m2 since March 2015).
  • Average gross rental for new developments: consistent at R64 m2
  • Escalation rates: consistent at 8%
  • Overall Vacancy rate: reduction of 3,52%
  1. Notable recent events:

  • The Cape Town property market has seen a continued increase in industrial activity continuing from previous report in September 2015.
  • There has been very little change in vacancy rates
  • In areas where new developments have taken place, notably Montague Gardens, Epping, Brackenfell and Airport, areas of over 1000m2 have increased significantly.
  • New industrial nodes such as Rivergate & Brackengate are showing signs of good activity.
  • A significant increase in building and development activity has been seen throughout the greater Cape Town area compared to previous years.
  1. Demand driven by efficiencies in modern buildings:

  • There exists good demand in all major areas for owner occupiers and from an investment perspective.
  • We are seeing a trend in demand for newer buildings/properties motivated by increase in overall efficiency.
  • Logistics operators are expanding their property portfolio to reflect the right balance between property and position.
  • The further decline in manufacturing is seeing buildings reconverted for logistics purposes.
  • Traffic and accessibility are main driving factors motivating relocation.
  1. Supply (Vacancies Overall)

  • Increase in space over 1000m² due to construction
  • Activity in:
    • Montague Gardens
    • Epping
    • Airport
    • Brackenfell
  • Decrease in outlying areas over 1000m² due to older space either being let or sold at lower rentals / competitive prices.
  • Decrease in space < 1000m² in all areas
  • New areas
    • Richmond
    • Atlantic Hills
    • Brackengate Phase 2

 

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