Although there is still huge demand for bigger industrial stands, some buyers are eyeing smaller industrial stands measuring from 200 to 3 000 square metres and priced up to R2 million.
Although there is still huge demand for bigger industrial stands, some buyers are eyeing smaller industrial stands measuring from 200 to 3 000 square metres and priced up to R2 million.
This is according to Org Geldenhuys, managing director of property developer Abacus Divisions.
“We are seeing this trend within in our own property portfolio and in the property portfolios we are involved in with clients.”
He says these interested buyers are not big-time developers, but rather owner-developers who are aiming to build their own warehouses.
Some of these developers will buy a 3 000 square metre stand and will ultimately take a portion of this space for their own needs - and then rent out the remaining space to two or three tenants.
“By doing this they have their own premises - and they have an income generating investment,” says Geldenhuys.
What’s more, he says this is good news for the market. People who have been reluctant to invest due to the recession of 2008 and 2009 are now gaining confidence and this certainly rings positive bells for the commercial property sector.
Geldenhuys says that while the office portion of the commercial property market should only start showing signs of growth in the second and third quarters of 2014, the industrial sector already started to show movement in late 2012.
For example, he says they have seen massive development for industrial development in Sunderland Ridge and the Route 21 Corporate Park in Irene.
However, he says one of the factors that could play a negative role is increased consumption fees being charged by councils and the heavy consumption costs from Eskom.
“These costs could, unfortunately, hold back real growth in the commercial property market – and I have seen some municipal bills, within our portfolio increase by as much as 300 percent which makes any recovery impossible.”
Essentially, what is happening is that municipalities - who are unable to manage their finances due to ineptness, are coming after private enterprises to rescue them, he adds.
Print
