Beddows says, “While we expect to see some rental growth only in the last quarter of 2010, there is encouraging news that approximately 80,000 m2 in industrial vacancies have been taken up over the past 6 months. However a large portion of the take up was the leasing of Racecourse Gardens in Montague Gardens and the sale of New Market Junction in Woodstock.

“At present there is an amount just short of 400,000 m² of vacant industrial buildings in the greater Cape Town area, either currently vacant or becoming vacant within the next 3 months or so. What is interesting is that two thirds of the vacancies are accounted for by buildings larger than 1,000 m².”

Beddow says that as can be seen on the accompanying pie-chart, the Southern Suburbs have a relatively low vacancy level, while the bulk of the vacancies are in the older traditional industrial areas such as Epping, Bellville and Parow.

“The average industrial land price is still hovering around R1,000/m² (Excl. VAT) ranging from R750/m² (Excl. VAT) in Blackheath, to the newer townships at R1,200/m² (Excl. VAT). There has been very little trade in land and very few Greenfield developments due to the high cost of a new development (mid to late R40s /m² net) versus the existing stock averaging R30.00/m² (Excl. VAT),”says Beddow.

He continues, “ Most of the major infrastructure upgrades have been completed or will be completed shortly, including the widening of the R300, widening the approach roads to the airport from the N2 and the major upgrade to the Koeberg interchange on/off the N1. This will alleviate traffic congestion and allow for improved flow. This may lead in time to a shift to nodes where better access makes them more popular.

“We expect a relatively constrained market for the next 6 months, although positive news is feeding into the market, with the Kagiso PMI manufacturing index released this month reflecting a surge during February to 60.4, the highest level since March 2007 - an index level above 50 signals expansion, while a reading below 50 indicates contraction.

“Also a good sign is that in the final quarter of 2009, South African GDP rose by an encouraging 3.2% quarter on quarter annualised, (seasonally adjusted).”

Beddow concludes,” It is generally still a tenants market and should you be thinking of relocating or expanding your business premises, the window for next 6 months is perfect timing with landlords keen to offer good deals.”

Go to www.baker-street.co.za where you will find the very latest detailed breakdown of industrial property vacancies in Greater Cape Town by area.