The most recent Epping Industrial Property Index shows that the industrial property sector in the Cape may now be slowing. (2017_Q3). This is after a solid performance for the last few years. Businesses seeking premises have had very few alternatives to consider – this could now be changing!
The IPD South African Annual Property index showed in April 2017 that industrial real estate was the top performer in 2016. A total return of 13.6% (capital and income) outperformed the traditional frontrunner, retail, at 12.6%. However, the current statistics shown by Epping Property indicate that the industrialised part of the SA economy may not be holding up as well as industrial property owners wish.
The latest Epping Industrial Property Index confirms that although the demand for industrial property is still high, it may now finally be weakening. (Actual statistics for the quarter ending September 2017 – 2017_Q3). The Index uses the most comprehensive and up-to-date statistics for the 3rd quarter of 2017 (Q3).
Epping Industrial Property Index
The amount of space available for rent has increased significantly. First of all, space available for rent has gone up about 40% on 2017_Q2. Consequently, the average weighted asking rentals have weakened and gone down to R48.90/m² gross, plus Vat. The lower priced premises are still in good demand due to businesses becoming more cost-conscious. Many of these lower rated buildings, however, do come at a “cost” of being older and less efficient. Furthermore, the “more top rated” buildings that have been let have been of the very highest specifications. While they may appear to have a higher R/m², they are much higher (taller) and offer a lower R/m³. Full compliance to modern fire regulations, lower electricity costs, modern building materials and better efficiencies for businesses. The amount of space for rent is still low, and companies need to plan their moves well in advance.
These statistics back up what is happening “on the ground” in the industrial market. While there is still a shortage of properties to rent, choices are becoming more plentiful. As a result, the amount of vacant space available to rent indicates a vacancy factor of about 5%. This amount of vacancy is still classified as low. These statistics show that although the economy is taking strain, there is continuing confidence businesses have in Epping Industria. Confidence is from both property owners and property users. Epping continues to offer all-round good value to landlords and tenants.
The only Industrial Property Index that gives up-to-date statistics for industrial property in Cape Town
The Epping Industrial Property Index is a collection of actual in-depth statistics. 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 largest 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 built industrial spaces in the whole of Epping. They have measured the total square metres available for rent, thus making our statistics the most accurate available.
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 a more detailed discussion on property values in Epping and the Central industrial areas of Cape Town.