Industrial Rental Growth in the Western Cape outpaces Inflation. The Western Cape is known for its vibrant economy and scenic beauty. It is also becoming a hotspot for industrial growth. Recent data from industrial property experts at Epping Property indicates that the industrial rental market in this region is not just thriving but is outpacing the inflation rate. Industrial rental growth in the Western Cape for the last three years has been 7.90% compounded.
Inflation has been a persistent concern globally, and the Western Cape has not been immune to its effects. As of June 2024, the annual inflation rate for goods stood at 5.1%, a slight decrease from the previous period. With the backdrop of lower global inflation, it is anticipated that inflation in South Africa will continue to drop even further.
Industrial Rental Growth in the Western Cape from 2021 to 2024 has been 7.90%
The latest statistics published by Epping Property show that industrial rentals in the Western Cape in the last three years have grown 7.9% compounded. A key factor contributing to this growth trend is the demand for industrial real estate. Driven by strategic location, increased investment, and effective governance.
The growth in the industrial rental sector in the Western Cape can be attributed to several additional factors. The rise of e-commerce and the consequent need for logistics and distribution centres have played a significant role. Additionally, the City of Cape Town is committed to avoiding the worst of the electrical crisis. The high growth in the general economy of the area has made it an attractive location for industrial businesses and industrial property development.
This trend is not just a flash in the pan but is expected to continue. With the predicted rate cuts from late 2024 onwards, investor confidence will likely increase. Thus, further stimulating the industrial rental market. The Western Cape’s strategic position, with easy access to ports and a prominent road network, continues to attract businesses. Thereby increasing demand for industrial space.
Looking at other periods, industrial rental growth in the Western Cape has been;
- 1980 to 2000 12.20%
- Since 1980 8.70%
- Since 2004 7.86%
- Since 2019 6.04%
- Since 2021 7.90%
From 2019 to 2021, we saw lower growth due to the global Covid pandemic but have played catchup in the last three years, says Epping Property.
The outpacing of inflation by industrial rental growth in the Western Cape is a testament to the region’s economic vitality and potential for sustained growth. It offers hope for the South African economy. Showcasing the possibilities when industrial development is supported by strategic planning and investment.
The current trends provide a strong foundation for making informed decisions for investors and businesses looking to capitalise on the opportunities within the Western Cape’s industrial rental market. According to Epping Property, the region’s ability to transcend economic challenges and maintain growth momentum is a compelling reason to consider the Western Cape a prime location for any business requiring industrial premises.