The latest industrial property market statistics (2023_Q3) confirm some interesting trends for the industrial property market in Cape Town. Vacancy levels have stabilised. Demand remains high for industrial space in Cape Town, albeit off a slowing economy, load shedding, a weaker exchange rate and higher interest rates.
Landlords are trying to increase their rentals, but tenants resist such increases – except for more modern industrial buildings.
Epping Industrial Property Index
What do these statistics show us about the current Industrial Property Market?
- The amount of vacant industrial space in Cape Town has stabilised – at a low level.
- Various businesses are still finding the current economy very tough.
- Businesses still favour the more modern industrial buildings, with most of these spaces now rented out, even at much higher rentals.
- Businesses are becoming aware of the efficiency of their premises. Issues such as height, stacking volume, number of columns in a warehouse, natural lighting, etc., are becoming factors in deciding upon premises.
- Asking rentals during the last 6 months have increased off the back of a lack of supply of space. The variance of asking rentals to achieved rentals has stabilised. Landlords are now starting to dig their heels in for rental levels.
- Tenants are also requesting leases with break clauses. While most landlords do not accept short-term contracts, the likelihood of the market offering short-term leases at a premium to long-term asking rentals exists. It is a matter of time before entrepreneurial landlords start accepting short-term contracts – but only at premium rentals.
The industrial property sector is important in South Africa
The industrial property market in SA holds immense value. Utilised for many business types, uses range from versatile to efficient. At this point, 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 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 with current fire regulations, lower electricity costs, advanced building materials and better business efficiencies, we give our clients access to prime industrial property. However, the overall amount of space for rent is still low. Companies must plan their moves well to ensure the suitable space is on time.
The only index for industrial property in Cape Town
These statistics back up what is happening within the industrial market.
This index is designed to assist property owners, tenants and other stakeholders in assessing the industrial real estate market, especially in Cape Town. Epping houses many of the most significant industrial companies in the Western Cape. It is an excellent gauge of industrial property in the entire Western Cape. The statistics forming the Epping Industrial Property Index are put together by the only company that works with landlords and tenants in Epping every day. Epping Property is the only company to have surveyed the existing industrial spaces, when completed, throughout the Epping area. Having measured the total square metres available for rent, our statistics are the most accurate.
Historical Growth of Industrial Rentals in Epping Industria
Read about the long-term rental trends of Industrial Property in Cape Town
Sales of properties in Epping Industria
The above information is an excellent indicator of rental demand and supply. Hereunder are all the properties sold and transferred during 2021. (For interest purposes, we have recorded the transfers of 2014, 2015, 2016 and 2017, 2018, 2019, 2021, 2022 and 2023). Please bear in mind that properties have different building sizes: Erf size ratios and various other characteristics – it is only meaningful to compare similar properties. Please contact Epping Property for more details on property values in Epping and the Central industrial areas of Cape Town.