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Western Cape - Further growth in demand for industrial properties

Against a backdrop of sobering global economic factors, which include the ongoing European debt crisis and slowdown in China’s economy, the local manufacturing sector in South Africa appears to be maintaining a positive outlook which has spin-offs for the industrial property sector.

This according to Shane Howe, leasing and sales broker for JHI Properties in the Western Cape.

“The drastic reduction in demand from Europe, coupled with the cooling of the Chinese economy would seemingly indicate a decline in the local manufacturing sector. However, with local manufacturing output reflecting growth of 7.7 percent in the first quarter of 2012 (Statistics SA), sentiment in this sector has exceeded expectations,” says Howe.

He says on a regional level, sentiment from commercial brokers within the Western Cape’s Northern Suburbs region is positive. “Requests for larger, better quality industrial premises from 1500sqm upwards are on the increase as businesses look to take advantage of the current situation with regard to manufacturing and currently depressed industrial rentals. This trend is combined with a general growing demand for industrial property. Users are looking for good power capacity and access for loading within a secure complex or area, and interestingly landscaping and the general aesthetics are playing an increasing role in their choice of location.”
Industrial areas in Cape Town’s Northern Suburbs are now very well positioned to service the burgeoning residential areas which have expanded so rapidly in the region in recent years. Coupled with this, improvements on the R300 route have also facilitated access to these industrial hubs.

Says Howe: “Enquiries currently received are mostly for warehousing and distribution operations. At Brackengate Business Park, with high visibility adjacent to the R300 highway and with easy access to the N1 and N2 highways, the take-up of sites has been good with a number of international brands relocating here. Fruit & Veg City is in the process of constructing a new head office and distribution centre on a 46 500sqm site. In addition, a joint venture between the developer, Van Der Merwe Venter Property Group, and Standard Bank Property Group, has seen the completion of a turnkey project for Pearson Education in the form of a 15 000sqm national distribution warehouse.”

He says the bold strategy of developers such as Intaprop and Van Der Merwe Venter Property Group has ensured they are well placed to capitalise on the ever-expanding Cape Town Northern Suburbs as well as the now steadily improving conditions within the manufacturing sector and local industrial property markets.

“The free brand exposure due to Brackengate’s strategic location right on the R300 is a major benefit for companies, while the nearby railway station and taxi stop provide access for employees. The park has 24 hour security with the entire perimeter secured by electric fencing. A formalised Property Owners’ Association ensures design and landscaping guidelines are followed,” says Howe.

Sites range from 1000sqm to in excess of 1.5ha with consolidation of sites up to 3.5ha possible. Currently only about 50 percent of the land remains available at prices ranging from R1300 to R1 500 per square metre. A recent major tenant is British American Tobacco which has just concluded a lease with the developer for a semi-purpose built distribution warehouse of 12 000sqm, with occupation anticipated by the end of this year (2012).

At Saxdowne Business Park, a 15ha mixed-use development that includes retail, offices, logistics facilities, distribution warehouses, small to medium scale manufacturing outlets and residential developments is being developed by Intaprop. Installation of services is expected to commence at the end of June (2012). Well situated at the intersection of the Stellenbosch Arterial and Saxdowne Road, with quick access to the R300 linking the N1 and N2 highways, this development is ideally positioned amid a growing commercial node south of Kuils River. With about 29 000 households located in a growing residential catchment area within a four kilometre radius of the park, employers have access to a potential workforce right on the doorstep.

The first phase of Saxdowne Park comprises some 50 ready-to-build Business 1 and Business 4 stands, with sites ranging from 1500-3000sqm which may be consolidated to form larger development parcels if required.



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