South Africa‘s recovery from the economic fallout of COVID-19 has been mixed, with some sectors bouncing back faster than others. 

This trend can clearly be seen in the commercial property sector with rentals in the office space, retail and industrial categories displaying markedly different levels of performance in the past year.

The good news for commercial property owners and tenants is that industrial properties appear to have staged a major comeback in the first quarter of 2021. 

Let’s take a closer look at the latest commercial property trends in the industrial sector and what they could mean for businesses and investors this year. 

Industrial properties are back on top 

The popularity of industrial units has been increasing since the pandemic and this commercial property trend was confirmed recently by the FNB commercial property broker survey for the first quarter. 

  • Brokers were asked to rate their optimism about industrial property rentals during the first three months of 2021 on a scale from 1 to 10.
  • The overall score of 6.51/10 recorded for Q1 of this year was the highest in more than a year, beating a figure of 4.5/10 during the lockdown in the second quarter of 2020. 
  • Vacancies showed a similar trend, with a decline of -18% according to property managers surveyed by FNB. This is in sharp contrast to an increase in vacancies of 50% or more for office rentals in some areas. 

Interest in industrial rentals not only increased over the past year but also rose to levels not seen before the pandemic. This is a clear sign that the industrial sector is on an upward trajectory across South Africa.

The Cape Town property market is experiencing strong demand for industrial premises.  In fact, a number of exciting industrial developments –  including logistics business parks –  are in the final stages of construction in various parts of the Mother City.

One of the most exciting projects being completed at this time is the new King Air Industria development that’s set to open near the Cape Town international airport soon.

Logistics on-demand: King Air Industria heralds a new era in Cape Town’s industrial property sector

Cape Town’s rapid population growth is creating a vibrant economy and a strong demand for industrial space. Developments like Epping Industria and Air King Industria are filling the gap in this market with modern, cutting edge logistics facilities to meet the needs of twenty first century tenants. 

The rise of eCommerce – especially during the pandemic – has seen a huge uptick in demand for specialised logistics business parks. Air King Industria, which opens to tenants in May 2021, is set to attract many well-known warehousing and logistics clients as the various phases of the development become ready to use. 

  • The development is located just 2km from Cape Town International, giving prospective tenants easy access to air cargo scheduled for pickup and delivery. This central location halfway between the CBD and northern suburbs is also an ideal home base for logistics companies with customers around the Cape Peninsula. 
  • King Air Industria is set on 72 hectares of land and features spacious industrial units with a mix of warehousing and office space included in each premises. The development is envisaged as a “logistics city” with well-known delivery companies said to be signing on as early adopter tenants. 
  • Security is of primary importance in the warehousing and transportation industry due to the high total value of goods stored on the premises. King Air Industria will feature a fully electrified high wall around the development’s large perimeter and 24-hour security. 
  • The development will also feature energy and water independence features like power generators and water pumps to help tenants run their logistics businesses efficiently despite the ongoing challenges of water shortages and load shedding. 

Developers show confidence in an expanding Cape Town industrial sector 

Despite the ups and downs of a pandemic-era economy, the Mother City’s expanding economy and its industrial sector, in particular, are attracting a spectrum of exciting construction projects. 

As developers and investors express their confidence in Cape Town as a business hub, now could be the ideal time to secure an industrial property in a logistics business park. Contact our team today to start the process of finding a commercial property that matches your company’s evolving needs.