Thursday, 29 September 2011
Above is the Baker Street Properties industrial property vacancy update for August 2011, which analyses the vacancies in the greater Cape Town market. The vacancies are categorized into mini-units (sub-500m²), 500 to 1,000m² and buildings over 1,000m².
Andy Beddow, a director of Baker Street Properties, says that vacancies continue to creep upwards in the local industrial property market.
This information is contained in the biannual analysis that the company has just completed of the vacancies across all industrial nodes, breaking the figures down into the sub-500 m², 500 m² to 1,000 m² and plus 1,000 m² categories. See accompanying pie-chart.
According to Beddow, using the figures from the analysis, there is a slight up-tick of vacant space to over 463,000 m² in the greater Cape Town area. This equates to an increase of 4% from May this year, in our last analysis.
Beddow adds, ”Most notable increase was the vacancies in the mini-unit sector for units under 500m², where vacancies increased by 17% from May this year.
“This indicates that smaller businesses are struggling in this economy and that a significant number of these have closed their doors, or have reached a point where they need to find sub-tenants to take over their rental obligations.
“Another striking vacancy increase was noted in Montague Gardens, where vacancies have increased by 39% since May this year, to an overall total of 68,575 m². This increase was predominantly in the larger industrial properties over the 1,000 m² mark.”
Beddow says that rentals have continued to remain static in the last 12 months and are not expected to increase during the remainder of the year. Average gross rentals across the board remain at R30.00/m² (excl. VAT), however the market is seeing deals being done now at R28.00/m² (excl. VAT) in popular industrial nodes, where the previously R30.00/m² (excl. VAT) was the minimum.
Power availability still remains an issue and tenants looking for large power supplies have a very limited choice in terms of property alternatives.
“Industrial land sales are also scarce and it is difficult to place an average rate on land, due to lack of volume of sales. However, there is definitely pressure on land prices and we have seen offers accepted at rates half of the asking prices from the peak in 2008. Even with lower interest rates, access to development finance is limited.
“In a reversal of the past few years, there are now several large good quality warehousing units available on the market. These units previously did not remain vacant for long, but are now lingering in the market ,“says Beddow.
“If your lease is expiring in the next 6 months please make contact with us to explore what options are available, as we have some very keen landlords ready to negotiate very attractive rentals, “concludes Beddow.
For further information on the industrial property market or to receive alternative property options please contact our team of industrial broker specialists on 021 461 1660 or go to www.baker-street.co.za where you will find the very latest detailed breakdown of industrial property vacancies in Greater Cape Town by area.
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