With reasonable rents and attractive yields, the local market offers several key advantages to offer global tenants and owner-occupiers


Our monitored take up in the Johannesburg Industrial sector shows significant improvements in take up figures, recording 162,692m²of demanded space in Q1 2013 compared to 78,819m² taken up in the previous quarter. This is a record 113% increase from the previous quarter driven mainly by the Southern node. The South attracted a key large corporate logistics occupier, Access Freight which took up 45,000m² of industrial space in the City Deep. Other notable deals this quarter included; Consol Glass taking up 20,000m² of industrial space in Bedfordview and BCE Food Services taking up 13,000m² of industrial space in Aeroton.

The South and the East continue to attract large industrial users mainly due to infrastructure, access to major highways and the quality of industrial facilities suitable for large users present in these nodes. The Western node this quarter also registered a significant improvement in take up, recording about  16,000m² of take up from a mere 4,890m² in the previous quarter. 


The monitored areas in Johannesburg experienced an increase in industrial stock by 38,000m² this quarter, taking the total stock of standard units to over 4,039,000m². Contributions to the increase in the industrial space included two significant completions namely, the 28,000m² Meadowview Business Park and the 10,000m² N1 Business Park in Centurion, again located in the sought after areas in  East and North of Johannesburg respectively. 

The development pipeline increased to 278,448m² during this period, although still a large portion is allocated to non-speculative developments. Our sample shows that 64% of the committed developments are tenant driven with almost half of these developments located in the Eastern node (132,442m²). 


Overall industrial vacancies in Johannesburg reduced to 4.5% due to improved take up and lack of significant completions in the market. This reflects that the market is absorbing current available stock due to landlords offering increased incentives to reduce vacancies and demand for bigger facilities and quality stock remains robust. 

Rental performance

The monitored average rental growth for Grade A Maxi units industrial buildings increased 1.7% year on year to an average of R48,80/m² per month.  It is however the performance of the rentals in the South that saw greater improvement as a result of renewed demand particularly in areas with great exposure to highways and infrastructure such as the Gosforth Park and Raceway. Gross Rentals for maxi units in the South are starting to catch up with the Eastern node, now averaging R50/m² whilst in the same period last year the same buildings averaged R45,00/m².  The annual increases in rentals for the South surpassed all other nodes in the Johannesburg area.

Whilst the current data shows a better performing industrial sector this quarter, the property clock for all units remained at the same level as the previous quarter. There are pockets of areas affected by the moderate economic climate, resulting in slow demand, flat rentals and uncertainly over the speculative developments. Nodes with distinct characteristics such as accessibility, infrastructure and supply of large Industrial are projected to have a better competitive advantage. 

There are however looming challenges evident in the economy such as unrelenting labour disputes, low consumer and business confidence, low productivity and electricity supply problems and rising operating  expected to impact the sector.

A shortage of prime properties is forcing a number of blue chip companies to take up space in new developments in prime nodes whilst the secondary market continues to suffer under the subdued economic environment.

Wednesday, 06 March 2013 09:46

Sandton the largest commercial property node

Sandton is the largest commercial real estate node in the decentralised area in Johannesburg.

Office rents in SA may soon rise in line with global figures after a stable performance in in the first quarter, according to Broll Property Group.

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