By Andrew Gillingham

The industrial property market is doing very well, with low vacancies, rising rentals, and good prices being achieved on sales.

Said Daniel Fisher, property broker at McCreedy Friedlander: "Over the past two years we have seen a 30% to 50% rise in net rentals. Specifically, the East Rand in Gauteng is very hot and space is in high demand, particularly space near OR Tambo International airport."

New developments under 5000m2 are going for between R32/m2 and R40/m2 net, and operating costs are about R4/m2 to R5/m2. Older industrial space is going for between R25/m2 and R30/m2. "Vacancies are very low and there are some opportunities further away from high-demand areas, such as Gauteng's Alrode, where there is some space going at about R20/m2," he said.

Engelbert Binedell, industrial property sector head at Investec Property Group, said the greater Gauteng industrial property market was extremely positive, with demand for good quality space driving rental levels that are further affected by the shortage of land zoned for development.

Greg de Klerk, regional portfolio manager at Investec Property Group, KwaZulu-Natal, said that existing industrial buildings were fully let in the province and landlords continued to investigate the options of upgrading and maximising permissible bulk with a view to extracting further value.

"The demand for industrial warehousing continues to be exacerbated by the shortage of land together with rising building costs.

"Developers are having to look further afield for new opportunities and larger areas to accommodate the growing inquiries," De Klerk said.

Business Times