Capital to convert racecourse into logistics park

Posted On Monday, 22 April 2013 11:28 Published by eProp@News
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JSE-listed Capital Property Fund foresaw an opportunity when it acquired Clairwood Racecourse to convert it into a warehousing and logistics park, according to Galetti Commercial and Industrial, the brokerage firm that negotiated the transaction.

Capital to convert racecourse into logistics parkGaletti director John Jack said the greater Durban area "is of huge strategic importance" to many large corporations in South Africa.

The property’s 5km proximity to the new Durban port was expected to "prove attractive to the likes of freight and logistics companies looking to base themselves within a convenient distance of port facilities", he said.

Citing steep increases in the prices of quality properties due to heightened demand, Capital changed its strategy last year and shifted its focus to undertaking new developments, particularly quality industrial properties.

The fund focuses on industrial properties and offices, although it recently disinvested from its government-tenanted offices.

The fund acquired Clairwood Racecourse in the final quarter of last year for R430m from Golden Circle. The 77ha property will be renamed Clairwood Logistics Park. Capital is leasing the racecourse to Golden Circle for two years, giving it time to complete reacquired rezoning processes and acquire environmental approval for the development.

The fund has earmarked about 400,000m² of warehousing to be developed at a construction cost of more than R2bn.

Mr Jack said Durban had a shortage of flat land suitable for commercial and industrial use, which was preventing the development of major warehousing. Companies requiring access to the harbour and close proximity to national road networks added another layer of complexity to the situation, he said.

The logistics park would provide a modern offering at competitive rentals and Galetti expected a major focus in the wider area with more prudent investors likely to acquire property within the same precinct.

Capital MD Barry Stuhler said in January that "the feather in the cap" of Capital’s 2012 financial results was the Clairwood Racecourse acquisition.

Capital executive director Andrew Teixeira said at the time the fund had a large focus on A-grade warehousing and logistics properties primarily in Johannesburg, Durban and Cape Town.

Warehousing and logistics properties were where Capital saw "good demand", Mr Teixeira said, and its industrial portfolio had historically had the lowest vacancies.

Industrial properties make up about three-quarters of Capital’s portfolio by gross lettable area and 55% by book value. Capital has experienced strong tenant demand in areas such as Linbro Park, Longmeadow and Raceway Industrial Park.

Source: BD 

Last modified on Monday, 20 May 2013 12:50

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