9 Dec 2004

THERE has been a strong uptick in the industrial property market for the first nine months of this year, with demand outstripping supply, according to Andy Beddow, director of Baker Street Properties.

Beddow comments, “This is the first time in many years that the industry is heading for a shortage of stock on both existing buildings and land. This has led to the market to consider new developments, due to lack of existing options.”

“Our company has had a remarkable year to date with the completion of two major developments which we co-ordinated. The first was the Elizabeth Arden project in Goodwood which commenced at the beginning of March this year. This multi-million rand project involved the complete revamp of the office block and reception areas with a new extension to the manufacturing and warehousing facilities. The new floor area of the buildings increased to 4 230 sq m.”

“The other was the new facility for Digistics, the exclusive centralised distributor for KFC and McDonald’s fast foods, located at Airport Industria. This new multi-temperature 1 000 sq m facility measures eight metres to the eaves, half of which is dedicated chiller and freezer rooms.”

Beddow adds, “Because of the greater confidence in the manufacturing sector, we are again seeing larger corporations signing long term leases of 10 and 12 years. For example Baker Street recently let a 12 000 sq m property to Nampak Paper Recycling in Epping on a 10 year term and have concluded two additional 12 year leases of late.”

“With the rapid development of new properties, the focus is now on the remaining vacant industrial land, where the average price is around R300/sq m. Baker Street has recently sold the last three remaining sites in Viking Park adjacent to Pinelands, totalling in excess of 13 000 sq m.”

Airport Industria and the adjoining Airport City is another area where Baker Street Properties have been extremely successful. Here, they have sold eight sites totalling 32 000 sq m this year alone.

Beddow concludes, “There is renewed focus on the airport industrial node. Great opportunities are still to be had at Airport City where various sized sites are available at very reasonable prices, offering excellent access and exposure to the N2 freeway, with the added benefit of being in a secured environment.”

“We anticipate that 2005 will be an interesting and possibly challenging year, as options become more limited and users look towards new developments at substantially higher rentals than they have enjoyed to date.”