By Nick Wilson

Industrial land and properties are becoming "hot items" on the auction floor in Cape Town and Johannesburg, says auction group Auction Alliance.

The general shortage of industrial property and zoned industrial land is driving prices up every time an auction is held, with 100% price rises in industrial land values recorded over the past year.

Norman Raad, head of commercial property for Auction Alliance in the northern region, says that in Johannesburg, zoned industrial land, especially in the airport area, is fetching "top dollar prices".

Raad says the price of land has "increased tremendously" over the past year.

Industrial land that was selling for about R300/m? in "marginal areas" is now selling for R600/m?. Prime industrial land is achieving close to R1,000/m?, up from R500/m? a year ago.

"There is very limited industrial land stock available as well as warehouse space. That is why land prices have skyrocketed," says Raad.

He says Auction Alliance is continually achieving better prices. "We are basically setting new price levels at every auction."

Industrial rentals have been following a similar trend over the past year, moving from R25/m? to R50/m?, says Raad.

Christian Stewart, of Auction Alliance in Cape Town, says owner-occupiers and developers have been scrambling to "get their hands on the next opportunity" on the auction floor. He says industrial land prices have also increased 100% in Cape Town over the past year.

Stewart says that recently, a 21,150m? site on the corner of Radnor Road and Modderdam Road in Parow Industria was sold on auction to a listed property fund for R29,6m. This equated to R1,450/m? and "surprised some of the pundits".

"It's no secret there is a scarcity of industrial land and in the better industrial nodes buyers are paying top dollar to get their hands on prime land."

Auction Alliance says the auction floor is "attracting a lot of prime industrial vacant land and the market continues to confirm that industrial land values are a moving target".

Industrial warehouse rentals were pushing upwards of R30/m? across the board.

Business Day