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Increase in demand for distribution and warehousing space

Despite the prevailing economic challenges, an encouraging trend evident in the commercial property market is an increasing number of enquiries for distribution and warehousing space, reports Jonathan Klimek, leasing consultant for JHI Properties in the Johannesburg area.

Klimek recently concluded a lease for a single-tenant building comprising 7772sqm of industrial space at 60 Electron Avenue in Isando, on behalf of ADC Energy, suppliers of electrical equipment for the mining and electrical industries.

Says Klimek: “Due to expansion of their business ADC Energy require much larger premises, and have taken up approximately 6000sqm of warehousing, with the balance comprising offices. While they were impressed by the cleanliness and good security of this well-maintained, light industrial property, which is well suited for storage and distribution, a key factor is the location as it has highway frontage onto the R24 and is close to two off-ramps.

“A noticeable trend of late is a concerted drive among larger distribution users to modern, dust-free space with good lighting, all of which is conducive to the storage and handling of goods. However, this is coupled with the key imperative of being well positioned and easily accessible to key transport routes and off-ramps, as this has a significant impact on travel time and transport costs - all critical factors in terms of logistics. They also seek generous yard space, for ease of handling and transportation.”

Klimek says the enquiries currently received for premises for warehousing and distribution are mainly in the size range of approximately 1000 sqm and below, or from 10 000sqm upwards.  There are also some businesses seeking to rent premises of around 2000/3000sqm in size. Generally the office component of large distribution operations is about 100sqm or 10 to 20 percent of the total space.

“At present a prime industrial property which is available for occupation is an adjacent building to the above mentioned property at 60 Electron Avenue, at a very competitive rental of R45 per square metre. Comprising 17 000sqm and with its own separate entrance, this property is owned by the same landlord and offers the same excellent exposure to the busy R24 key route leading to OR Tambo International Airport or towards Johannesburg. With such ideal advertising space ‘free’ with the property, any business stands to benefit through the high exposure and thereby reduced advertising or marketing costs,” he says.

Klimek says the timing is ideal for those seeking to rent industrial property as in the current economic climate, landlords are making properties attractive to tenants and offering generous installation allowances and very competitive rentals.

“We are also marketing an entire building to let which comprises 7845sqm, which is situated in popular Linbro Business Park, on the N3 highway. This A grade, modern building is ideal for a distribution business, and includes offices and a large yard. Available at a rental of R55 per square metre, which is very competitive for this business park, the property is close to off-ramps and also enjoys highway frontage, providing considerable spin-offs. Being able to brand your own building provides a tenant with considerable marketing opportunities,” adds Klimek.


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