Murray elaborates, " The position has now been reached where land in the popular established areas is becoming almost impossible to find, forcing investors to look further afield. The following comparison gives an idea of how prices have moved in the past year:

Montague Gardens R300/m² R600/m² 100%

Killarney Gardens R200 R500 150%

Airport Industria node R185 R350 89%

Epping R150 R250 66%

Parow R165 R250 51%

Blackheath R 90 R110 22%

Bellville R200 R350 75%

‘A notable exception to the huge price increases as can be clearly seen from the figures above is Blackheath, where the increase has been minimal compared to the other areas. We believe this could change dramatically over the next year as investors realise the large discount available in Blackheath compared to adjoining areas. Blackheath has excellent arterial access and is in the process of initiating a City Improvement District (CID). This concept has greatly improved the security and cleanliness of other areas including the Cape Town CBD and Epping."

Murray adds," When one considers that Blackheath is only a ten minute drive from adjoining areas such as Bellville and the Airport, the land price differential of over R200/m² seems unsustainable.

"The fastest moving area in terms of land sales in the last 6 months has been industrial land in and around Cape Town International Airport. Airport Industria is now sold out, while Phases 1, 2 & 3 in the Airport City development have also sold out, with sales prices averaging R350/m². There is already a waiting list of buyers for Phases 4 to 6, which will be ready for transfer around September this year."

Whilst industrial rentals have firmed on the back of stronger demand Murray predicts that rentals will rise to accommodate the higher land and construction prices. The increases have been offset to a certain extent by the fact that capitalisation rates have come down (capitalisation rates are in effect the return that investors look for on their investments). These peaked in 2001 at between 14% and 18%, however on the back of lower interest rates and a more confident economy these are now in the region of 10,5% to 12,5% depending on the nature and location of the property

Baker Street Properties have achieved exceptional sales in past few months selling over 70 000m² of land totaling R19 million and existing industrial buildings with a value in excess of R80 million.