THABANG MOKOPANELE

Property Editor

NATIONAL industrial vacancies clearly moved up last year and are at present above both the three-and five-year average.

According to the South African Property Owners Association (Sapoa) survey for November, the aggregate national vacancy rate of 3,71% at June showed a six-month increase of 1,07 percentage points from December 2008’s 2,64%.

Sapoa said last week the current vacancy rate was the highest since the end of 2003, reflecting global and local economic forces, and marked the start of the next stage of the property cycle.

It said data obtained from one of the large property management companies relating to about 2,5 million square metres of industrial space showed that during the third quarter of last year industrial vacancies already hovered close to the 8% level.

The downturn had created a conundrum for commercial property owners, with vacancies rising and rentals under pressure.

Rawson Properties MD Tony Clarke said it was now evident that vacancies were growing in the major commercial nodes and shopping malls.

Sapoa said while warehousing had tended to be the least volatile segment of the industrial market nationally, with 5,44% vacancies, it was experiencing slightly higher levels compared to other segments.

One of the reasons for this was attributable to the broad economic links between the retail and wholesale markets and the demand for industrial warehousing, including lower inventory requirements.

In terms of the average size of industrial spaces, Sapoa said it was clearly the larger properties that were performing better in terms of vacancies, with small and medium units tending to follow one another quite closely.

Interestingly, warehousing had enjoyed the strongest growth in net income, with lower-grade light manufacturing space lagging the other segments by a fair margin, albeit experiencing relatively strong net income growth in the six months to June.

Sapoa said given the slight disparity between warehouse occupation and net income, the most likely explanation was that operating costs were relatively lower than was the case in other formats.

“Given the better performance of larger-size units from a vacancy perspective, the higher net income growth rate relative to small and medium-size units is therefore not surprising,” Sapoa said.

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Source: Business Day