Demand for Big Box warehousing grows in Gauteng

BRAND ACTIVITY

Nov 20th, 09:00

Big Box warehousing will continue to offer lucrative opportunities to industrial property investors for the year ahead, according to leading property group Galetti Knight Frank. Given the current projected growth in this market in South Africa, most of the deals concluded are likely to come from consolidation, as the trend appears to be moving towards more efficient warehousing, the group says.

Gauteng has seen huge uptake of speculatively built distribution centres (DCs) over the last 12 to 18 months, with Improvon, Intaprop and Capital Property Fund staking the biggest claims. Already, their strategies appear to have paid dividends.

Spec builds by Capital Property Fund in Raceway Park in Germiston include 11,000sqm DC that secured tenancy upon completion from the South African Police Services (SAPS); a 23,000sqm space already let to Montesanto upon completion; and another 40,000sqm DC for which construction has just begun. John Jack, Galetti Knight Frank’s Gauteng Director is confident of securing a tenant before the keys are in the door.

Jack says, “Efficiency is paramount to this segment of the industry and new builds such as those currently going up at Raceway are designed specifically to offer maximum storage options. That’s why we’re finding old style warehousing, typically with low roofs and difficult layout, will experience some vacancy over new builds. He adds, “Especially with the cost of refurbishment now nearing that of a brand new building.”

Improvon’s development in Gosforth Park, adjacent to Raceway, has just been leased to a division of Shoprite. The 21,000sqm speculative build is set for completion this month still.

Meanwhile Meadowview Business Park, next door to Longmeadow and developed by Intaprop, another prime commercial space that is zoned for industrial warehousing, is seeing leading companies sign-up.

Other new builds at the park include a completed 35,000sqm DC for UTI, and still under construction is a 5,000sqm build for Esco Corporation, a 10,000sqm build for Premier Foods and a 20,000sqm build for Gold Leaf. Galetti Knight Frank’s Justin Thom, who concluded the deal with Triton maintains the park offers unbelievable value for those companies looking for prime location in Gauteng.