The nationwide lockdown is ending in phases and businesses have started to operate in line with the new normal and a vastly different economy. Commercial property owners have been scrambling to attract tenants with a new commercial property approach in the post COVID-19 era to keep their office spaces competitive – but one specific property type is enjoying excellent demand.

Warehouses and manufacturing sites are seeing increased enquiries as eCommerce drives demand for industrial property. Let’s take a closer look at this trend which is causing great celebration in the sector.

Industry leads the way to economic recovery

In Q1 the economy contracted by 2% and the Reserve Bank forecasts that South Africa’s GDP will have contracted further during lockdown and by more than 7% by the end of this year – and that means there’s a lot of potential for growth as the economy rebounds.

  • With many consumers still practising social distancing by choice and ordering everything from groceries to champagne to homeware online, eCommerce sites have never been busier.
  • The increased volume of business that online retailers are seeing means that they’ll need to expand their warehousing and logistics operations – and that’s excellent news for light industrial property owners.
  • In addition to eCommerce, the government’s R500 billion economic stimulus package places a strong emphasis on industrial development.

With more than 12 years of experience in the industrial leasing, sales and project development sector, de Waal Davis of Commercial Space believes that these factors, working in tandem, should create extra demand for light industrial properties in the coming years as companies in two economically important, job-producing sectors expand their footprints.

An essential part of every retail business

Unlike retail space which may see lower demand as customers start to avoid large malls by habit, warehousing space is an essential aspect of every retail business.

  • eCommerce companies and online retailers are disrupting the space that was traditionally dominated by physical retailers.
  • Fortunately for the industrial property sector, it’s not that easy to disrupt the demand for warehouse space. After all, products have to be stored somewhere safe and conveniently located before they are dispatched to customers.
  • With online retail requiring up to three times the space of traditional retail for the fulfilment of orders, the demand for industrial space should increase as the trend for home delivery and online shopping continues.

A rejuvenated manufacturing sector seeks innovative premises

One of the consequences of the coronavirus outbreak has been the rebirth of local manufacturing.

While major countries try to outbid each other to secure supplies like masks and medication, South Africa is facing the reality of supplying the public and healthcare sector with Personal Protective Equipment (PPE) at a time when the Rand is weak.

The demand for medical supplies – and the need to manufacture them reliably to ensure supply – means that many PPE-focused businesses have been established over the past few months.

These enterprises almost always choose to rent industrial floorspace – and that’s an extra bit of good news for the sector.

Looking for industrial premises? We’re here to assist

If you’re in the market for a light industrial or manufacturing base in the greater Cape Town area to suit your commercial property budget, the Commercial Space team would love to get in touch. Contact us today to speak with one of our experienced area specialists.