The industrial property sector in Cape Town has performed well for the last 2 years. However, the most recent Epping Industrial Property Index shows that the industrial property sector may finally be slowing. Businesses in Cape Town seeking premises have had very few alternatives to consider in recent times. This could now be changing!
The IPD South African Annual Property index in April showed that industrial property was the top performer in 2016. Boasting a total return of 13.6% (capital and income), it outperformed the traditional frontrunner, retail, which came in at 12.6%.
The latest Epping Industrial Property Index (2017_Q3) confirms that the amount of space available for rent has risen significantly. In line with the higher amount of space for rent, asking rentals have also softened in general. While demand for space is still high, the actual statistics show that the need for vacant industrial premises is slowing. Has the industrial property market in Cape Town turned?
Epping Industrial Property Index
Total square metres available to rent has gone up 40%. Asking rentals have softened.
The industrial property market in SA holds huge value. Utilised for a multitude of business types, uses range from versatile to efficient. At this point in time, it is difficult to say which industrial sectors, in particular, are slowing the most.
The “top rated” buildings have the highest specifications. These buildings tend to let first. While these “top rated” properties may appear to have a higher R/m², they usually have much higher ceilings. They thus actually offer a lower R/m³ rate to tenants. Boasting full compliance to modern fire regulations, lower electricity costs, advanced building materials and better efficiencies for businesses, we give our clients access to premium industrial property. However, the overall amount of space for rent is still low. Companies need to plan their moves well in advance to ensure the right space is found on time.
The only index for industrial property in Cape Town
These statistics back up what is happening on the ground, within the industrial market. There is now a significant shortage of properties to rent, especially for the larger, more modern buildings. For the first time in a while, developers have started building warehouses “on spec”, pre-empting the tenant’s range of needs. With vacancy at around 5%, there is a low availability industrial property to rent. These statistics show the continuing confidence medium and large businesses have in Epping Industria. Epping Industrial Property continues to offer excellent all-around value to both landlords and tenants.
This index is designed to assist property owners, tenants and other stakeholders in assessing the industrial real estate market in greater Cape Town. Epping houses many of the most significant industrial companies in the Western Cape. It is an excellent gauge for industrial property in the entire Western Cape. The statistics forming the Epping Industrial Property Index is put together by the only company who works with landlords and tenants in Epping every day. Epping Property is the only company to have surveyed the actual industrial spaces when completed, throughout the Epping area. Having measured the total square metres available for rent, our statistics are the most accurate available.
Sales of properties in Epping Industria
The above information is an excellent indicator of rental demand and supply. Hereunder is a list of properties sold and transferred during 2016. (For interest purposes, we have kept the transfers of 2014 and 2015 recorded). Please bear in mind that properties have different building size: Erf size ratios as well as various other characteristics – it is only meaningful to compare similar properties. Please feel free to contact Epping Property for more details on property values in Epping and the Central industrial areas of Cape Town.