Cape Town’s industrial nodes have seen a steady decrease in vacancy rates over the past two years. As these vacancies are taken up, property owners and tenants can expect rentals to pick up.

The demand for industrial property however, favours the newer developments. The reason for this preference is tenants are looking for vertical space of between 8m and 12m that can be used for racking, and interior volumes that have few internal columns so as not to interfere with the movement of forklifts. These requirements seem to carry more weight than the physical footprint of the industrial property.

In practice properties in older industrial areas like Epping, Maitland and Bellville South therefore seem to be less attractive. Hence, properties in these areas are slightly cheaper than in prime industrial nodes, and may become attractive buys for redevelopment.

Paarden Eiland on Cape Town’s west coast has a similar problem in that warehouses and factories are seen as too dated. However, this node has access to good public transport through the city’s BRT system. Its proximity to Cape Town’s CBD also allows property in the area to command fairly good rentals. Not surprising, there is very little new industrial land available in Paarden Eiland.

The industrial area around Cape Town International airport is a very attractive location for light industrial development. North of the N1 relatively new industrial areas like Montague Gardens, Montague Park, Racing Park, Killarney Gardens, Racing Park, Atlantic Hills and Atlas Gardens – to name a few – have proved very popular.

Montague Gardens is still considered the most attractive address for industrial development. The industrial node has good access to the airport via the N7 and N2 national roads, and is only ten minutes from Table Bay harbour. Montague Gardens’ modern industrial sites are well geared to cater for modern warehousing. The industrial area is also close to residential areas, as well as the commercial and office developments at Century City. There are however, very few properties available for rent in Montague Gardens.

Killarney Gardens, like Montague Gardens also has a very low vacancy rate. It too benefits from being close to the airport and CBD, and access to good public transport. It is also surrounded by residential suburbs.

Milnerton Industrial area and Marconi Beam, between the Koeberg and Bosmandam Roads, appear to be favoured by light industries, and benefit from proximities to Centurion Business Park, Woodbrdige Business Park and Platinum Junction Business Park.

Looking at Cape Town as a whole it is clear that there is very little space available for tenants looking for sites in excess of 5 000m2. Boat builders in the Table Bay harbour area have also expressed a need for adequate space with an 8m clearance.

In addition, undeveloped land is in very short supply and there is very little prime industrial property available for new industrial developments. Properties that are available, especially in prime nodes like Montague Gardens and Killarney Gardens, are sold at premium prices.

Industrial property in prime locations are expected to remain in short supply in the foreseeable future, and these shortages will continue to put pressure on rentals.

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