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What to expect from the Industrial Property Market in 2024

3rd August 2023 by Tony Bales

There is a significant lack of suitable industrial premises for rent in the greater Cape Town area. Why is this, and what are the long-term implications for the industrial property market?

Firstly, the amount of industrial space for rent is at its lowest level in many years. (The statistics for Epping Industria mirror the other leading industrial areas in Cape Town)

High-level Industrial Property Trends in 2024

Changing Market Dynamics

The global property industry is expected to start rebuilding on more solid ground in 2024. Multiple factors, from a pandemic-era recovery that shifted how and where people work to more recent geopolitical uncertainties and financial market instability, are expected to be pivotal in firms’ ability to recover and build up. An example of this is the strong demand for industrial property in Cape Town.

New Consumer Behaviour in Retail

The double-digit growth in e-commerce sales will continue to drive demand for industrial property.

Smaller but better offices

There’s an acceptance in the industry that a less people will be working from formal offices. (Through technological changes, or more remote working). This has profound implications not only for industrial office users, managers, and brokers but also for the other property sectors that depend on a vibrant office market.

Environmental, Social and Governance (ESG) Considerations

Many companies aren’t yet ready to meet looming ESG regulations. Landlords and occupiers of industrial property need to be aware of, and make more effort to meet global ESG standards.

Rise of PropTech and the Internet of Things

The continual computerisation and advancement of cloud and business systems will dictate how many buildings are built in the future.

Specific South African Industrial Property Trends in 2024

Rental Growth will continue

Fueled by the shortage of suitable modern premises, mild rental growth is likely to continue into 2024.

Building costs will continue to rise

While inflation is likely to start coming down, building costs will still increase.

Shortage of industrial space in Cape Town

The shortage of industrial space to rent and for sale will continue in Cape Town.

What type of premises is the last to be let in the Industrial Property Market?

  • Warehouses/ Factories with lack of open internal height.
  • Yard areas with a lack of sufficient truck turning areas.
  • Warehouses with no/ insufficient sprinkler system.
  • Warehouses not conforming to current fire regulations.
  • Warehouses/ factories with asbestos roofs and other less environmentally friendly materials.

How rent-sensitive are industrial businesses?

  • Modern industrial buildings offer better efficiencies; hence, the effective R/m³ is less than in older buildings.
  • Businesses clearly favour modern facilities over older facilities, despite the higher R/m² rental.
Packer Park

What types of industrial buildings will attract the best tenants in the future?

  • Modern buildings have structural benefits such as fewer columns, allowing for greater flexibility and higher productivity of space over time.
  • New, high-specification, super flat floors offer better safety standards and less wear and tear on forklifts.
  • Premises that adhere to the latest fire regulations.
  • Modern security systems.
  • Yard areas and loading bays are designed with large modern trucks in mind.
  • Modern buildings that provide for reduced energy costs of various utilities:
    • Significant amounts of natural lighting. Lower lighting costs.
    • Energy-efficient lighting. Lower lighting costs and more prolonged usage per low-wattage item.
    • Reduced water wastage and hence less water usage.
    • Reduced temperature control costs.
    • Provision for solar energy installations.
  • Use of modern, environmentally sensitive materials. Often these materials also last longer than their older, outdated predecessors.
  • New buildings with a modern design provide an appealing, healthy environment for staff. Hence better productivity, lower staff turnover and improved quality of life.
King Air Industria

Industrial property owners must know the requirements of better industrial businesses in the current industrial property market and ensure their industrial property portfolio adapts accordingly. If not, they will be the last to attract tenants …… at the lowest rentals.

Mob: +27 76 111 0000

Tel: +27 21 531 0026

E-mail: info@eppingproperty.co.za


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Articles & Documents

  • Epping Property Newsletter – 2025 edition
  • The Brokers of Epping Property
  • Industrial Rental Growth in the Western Cape outpaces Inflation
  • Trends in Industrial Real Estate in South Africa: A Spotlight on Cape Town in 2025
  • 17 Industrial Properties Sold in Cape Town by Epping Property
SAPOA

Testimonials

Tafelberg Furnishers

Following a fire at our Epping factory, we decided to reconfigure the business differently and sell the Epping property. Epping Property secured us an excellent transaction to a solid purchaser. We would highly recommend Epping Property as experienced, trustworthy industrial property dealmakers.

Management, Tafelberg Furnishers

Epping Property
2020-01-16T16:01:19+02:00

Management, Tafelberg Furnishers

Following a fire at our Epping factory, we decided to reconfigure the business differently and sell the Epping property. Epping Property secured us an excellent transaction to a solid purchaser. We would highly recommend Epping Property as experienced, trustworthy industrial property dealmakers.
https://www.eppingproperty.co.za/testimonials/management-tafelberg-furnishers/

AVI Ltd

During November we were a little stuck in finding an appropriate warehouse to relocate to. Epping Property did an extensive search in all the central industrial areas. They eventually found our suitable premises and negotiated a deal that both ourselves and the landlord were very happy with.

Management, AVI Ltd

Epping Property
2017-05-08T11:48:22+02:00

Management, AVI Ltd

During November we were a little stuck in finding an appropriate warehouse to relocate to. Epping Property did an extensive search in all the central industrial areas. They eventually found our suitable premises and negotiated a deal that both ourselves and the landlord were very happy with.
https://www.eppingproperty.co.za/testimonials/management-avi-ltd/

Growthpoint Properties

Epping Property reliably assists us in keeping our portfolio in the Central Industrial areas of Cape Town tenanted with good, solid businesses. We can highly recommend anyone looking to rent or to buy property in Epping to deal with the experienced Epping Property team.

Management, Growthpoint Properties

Epping Property
2017-05-08T11:48:51+02:00

Management, Growthpoint Properties

Epping Property reliably assists us in keeping our portfolio in the Central Industrial areas of Cape Town tenanted with good, solid businesses. We can highly recommend anyone looking to rent or to buy property in Epping to deal with the experienced Epping Property team.
https://www.eppingproperty.co.za/testimonials/director-edge-properties/

Truworths Limited

We are exceptionally happy with the purchase of both 22 and 26 Bertie Avenue in Epping. It makes 100% sense for our company to have secured this location. We will now be expanding the warehousing and distribution side of our business onto the properties. Thank you.

Management, Truworths Limited

Epping Property
2017-05-08T11:49:17+02:00

Management, Truworths Limited

We are exceptionally happy with the purchase of both 22 and 26 Bertie Avenue in Epping. It makes 100% sense for our company to have secured this location. We will now be expanding the warehousing and distribution side of our business onto the properties. Thank you.
https://www.eppingproperty.co.za/testimonials/management-truworths-limited/
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