Rentals cheap in global terms

Posted On Monday, 01 July 2002 10:01 Published by
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THE industrial property sector is seen to offer growth potential, given that prime industrial rentals in SA are cheap compared with those in other world economies
THE industrial property sector is seen to offer growth potential, given that prime industrial rentals in SA are cheap compared with those in other world economies.

Ian Watt, MD of Old Mutual Properties, says that top space in and around Johannesburg commands the equivalent of à 32/m² a year.

The corresponding rental figures for Cape Town and Durban are à 21 and à 14.

This compares with à 195 at London Heathrow, à 112 in Dublin, à 108 in Tel Aviv and at the low end of the European scale à 55 in Brussels and à 61 in Vienna.

He says that bigger users are looking for premises better equipped than those on offer.

'This is leading to select developments, notably for ownerusers, and increased opportunities for redevelopment in the older industrial areas.'

The firm is involved in several projects for owner-users. Two of these one in Roseville Park, Pretoria, and the other in the TokaiRetreat node in Cape Town are scheduled for completion before year-end.

The R35m Cape Town development, with Barloworld Motor as the purchaser, will include a Barons VW dealership of 3005m² and a coachworks and panelshop of 2247m².

In addition, a 1368m² motor facility is being developed on the site for Abland. A R13m development in Pretoria is for Metrofile, an archiving and paper storage firm.

The building has been designed to meet Metrofile's specific requirements and will consist of a 3000m² warehouse, with an eaves height of 19m, and 850m² of offices.

'Conditions prevailing in the industrial market are in contrast to those in the office sector,' says Watt. 'There, an over-supply in some areas has resulted from indiscriminate zoning and construction.

'Office incursions into prime residential areas have eroded values of neighbouring homes.

'The discipline of building to demand is at least apparent in the industrial sector.'

Watt says that while newer nodes with land availability such as Midrand in Gauteng and Montague Gardens in Cape Town offer opportunities for development, longer established areas offer interesting prospects as well.

'An example is Paarden Eiland in Cape Town. Some buildings there have become obsolete, but the factors that made it a pre-eminent industrial area still exist.'

Business Day

Publisher: Business Day
Source: Business Day

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