PROPERTY: Industrial Rentals Set To Remain Static
Recent Western Cape Business News
Industrial property rentals in the greater Cape Town area are likely to remain unchanged for much of this year, according to Andy Beddow, a director of Baker Street Properties.
Beddows says, “While we expect to see some rental growth only in the last quarter of 2010, there is encouraging news that approximately 80,000 m2 in industrial vacancies have been taken up over the past 6 months. However a large portion of the take up was the leasing of Racecourse Gardens in Montague Gardens and the sale of New Market Junction in Woodstock.
“At present there is an amount just short of 400,000 m² of vacant industrial buildings in the greater Cape Town area, either currently vacant or becoming vacant within the next 3 months or so. What is interesting is that two thirds of the vacancies are accounted for by buildings larger than 1,000 m².”
Beddow says the Southern Suburbs have a relatively low vacancy level, while the bulk of the vacancies are in the older traditional industrial areas such as Epping, Bellville and Parow.
“The average industrial land price is still hovering around R1,000/m² (Excl. VAT) ranging from R750/m² (Excl. VAT) in Blackheath, to the newer townships at R1,200/m² (Excl. VAT). There has been very little trade in land and very few Greenfield developments due to the high cost of a new development (mid to late R40s /m² net) versus the existing stock averaging R30.00/m² (Excl. VAT),”says Beddow.
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