Industrial Rentals Cape Town – see how they’ve grown during the last 38 years! During lease negotiations, landlords and tenants often discuss the average growth in rentals over time. Short growth periods, stagnant growth periods, or sudden downturns can sometimes skew one’s idea of long-term trends.
Epping Property has analysed the historical data for industrial rentals in Epping Industria in Cape Town. The rentals in Epping Industria are viewed as a good sample for average long-term rentals in Cape Town.
Growth in Industrial rentals Cape Town:
- 9.23% per annum compounded. Long-term growth in industrial rentals in Cape Town for the last 38 years.
- 12.76% per annum compounded. The growth of industrial rentals during the “higher inflation” era of 1980 to 1999. (During this period, average contractual lease escalations were 12% per annum).
- 5.81% per annum compounded. The growth of industrial rentals during the “lower inflation” era of 1999 to 2018.
- 8.04% per annum compounded. The growth of industrial rentals during the last 12 years – 2006 to 2018. (During this period, average contractual lease escalations were 7% to 8% per annum).
Looking at the graph, periods of low growth and/ or periods of high growth can significantly influence shorter-term trends. The long-term growth tendencies are nonetheless apparent.
Knowing precisely what market rentals are, is an essential part of all rental negotiations. While the above rentals indicate the general trend, one does have to be mindful that each set of industrial premises has different attributes. Therefore each and every premises will have different market rentals at any one point in time. For this reason, we recommend one keeps in close contact with a specialised industrial property broker who can give one an accurate assessment of a premises’ correct current market rental.
Industrial rentals are also the main determinant in assessing the market value of an industrial property. Therefore, accurate rentals are also required when valuing industrial property.