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Why Owners should modernise their Industrial Buildings

30th May 2023 by Tony Bales

Why Owners should modernise their Industrial Buildings. Industrial property is a valuable asset class that generates steady income and capital appreciation for owners in South Africa (and beyond). However, owners must periodically modernise and upgrade industrial buildings to remain competitive and attractive to tenants. Epping Property believes industrial property owners should update their industrial buildings over time. Here, they offer some insights on how to do so effectively.

Modernising industrial buildings brings several benefits to owners in the South African industrial property market:

  • Increased rental value and occupancy rate of the property. Modern industrial buildings offer tenants better amenities, functionality, efficiency, and safety, increasing demand and willingness to pay higher rents. Moreover, modernised buildings reduce vacancy rates and tenant turnover. Tenants are more likely to renew leases and stay longer in well-maintained and updated properties. According to MSCI, the industrial property vacancy rate was the lowest among all commercial property sectors in South Africa in 2022. This will likely also be the case for the entire 2023.
  • Reduced operating and maintenance costs of the property. Modern industrial buildings incorporate energy-efficient features. Such features include LED lighting, solar panels, backup power, smart thermostats, and sensors that lower utility bills and the property’s carbon footprint. Additionally, modern buildings prevent costly repairs and replacements as they are less prone to structural issues, damage, and obsolescence.
  • Enhanced market value and resale potential of the property. Modern industrial buildings increase their market value and attractiveness to potential buyers. They reflect current trends and industry standards. Furthermore, modernised buildings improve marketability and liquidity. They are easier to sell and finance than outdated and depreciated properties.

Owners should consider the following factors to modernise their industrial buildings effectively:

  • The needs and preferences of target tenants. Owners must conduct market research and analysis to understand what target tenants seek in an industrial property. Factors include location, size, layout, security, parking, truck turning circles, loading facilities, power supply, internet connectivity, etc. Owners should also monitor the performance of different sub-sectors within the industrial property market. Such as manufacturing, warehousing, logistics, etc., and tailor their properties accordingly.
  • The budget and return on investment of the project. Owners must assess the costs and benefits of modernising their industrial buildings and prioritise the most impactful and feasible interventions. Owners should also seek professional advice from property consultants (such as Epping Property), architects, engineers, contractors, etc., to ensure quality workmanship and compliance with relevant regulations and standards.
  • The timing and duration of the project. Owners must plan ahead and schedule the modernisation project at a convenient time for both themselves and their tenants. Owners should also minimise disruption and inconvenience to their tenants during the project by communicating clearly and providing alternative arrangements if necessary.

In conclusion, modernising industrial buildings is a worthwhile investment for property owners. Modernisation enhances property performance, profitability, and value. Owners should strategically consider the benefits, costs, and risks of implementing modernisation projects to maximise outcomes.

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Articles & Documents

  • What to expect from the Industrial Property Market in 2024
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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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