WITH the increasing demand by owner-users currently leasing properties eager to acquire their own investments has left the industrial segment of the market depleted of good quality available factory/warehouse space.

Add to this the growth in the economy, low interest rates and readily available funds from the banking sector, this is forcing the market to look further afield.

"Numerous turnkey projects currently in progress offer an excellent alternative for potential buyers or investors, where on their behalf we have sourced suitable land and built to their requirements," says director Hector Toms of the industrial division of Divaris Property Brokers.

He points out that ever increasing land values and building costs have put downward pressure on rates of return, which filter through to increased rental rates in the industry. This has also led to renewed interest in some of the neglected industrial areas surrounding the periphery of Cape Town’s CBD, the likes of Woodstock, Salt River and Observatory, which are starting to see revival.

On the commercial side prospects are also looking good.

Len da Costa, retail property broker of Divaris for Cape Town CBD, Atlantic Seaboard and Southern Suburbs, report surge in demand for premises within his division. This department has concluded several significant leases this year, which include several leases of premises previously occupied by national tenants, both in the city centre and the suburbs. He reports that there remains a strong demand for good retail locations of all sizes.

The upbeat economy continues to encourage companies and entrepreneurs to expand their retail businesses or to start new business ventures. With a number of national tenants having gone through considerable restructuring over the last number of years and focusing on the larger malls, more and more independent operators are taking up space previously occupied by them.

Large showroom street frontage Main Road premises recently let by this division have commanded rentals between R60 to R80 per sq m with annual escalations at around the 10% level. Prime CBD high street locations in the trendier part of the city which rarely become available are achieving rentals as high as R150 per sq m.