The industrial property landscape in South Africa is experiencing robust activity across key regions like Gauteng, Western Cape, and KwaZulu-Natal, according to Johann Nell, head of Development & Industrial Asset Management at Redefine Properties.
This activity is largely propelled by the escalating demand for logistics and supply chain infrastructure, driven by the burgeoning e-commerce sector in the country, he says.
Takealot, a prominent e-commerce entity under Naspers ownership, has significantly expanded its warehousing footprint not only in Gauteng but also in the Western Cape and more recently in KwaZulu-Natal's Riverhorse Valley.
Additionally, the market has seen the entry of global players like Buffalo Logistics, catering to major Asian e-commerce platforms Temu and SHEIN, as well as the tech giant Amazon from the United States.
E-commerce and Its Implications
As e-commerce continues to gain traction, forecasted to see a remarkable 150% growth in transactions by 2025 according to Rand Merchant Bank, businesses are increasingly investing in online platforms, says Nell.
This shift is driving the need for warehouse spaces, consequently fuelling the development of industrial properties.
Over the past decade, there has been a notable transformation in the industrial property market, notes the industrial property expert.
Traditional manufacturing activities have taken a backseat, making room for logistics and supply chain operations due to changes in trade dynamics and the influx of imports.
Embracing High-Tech Industrial Spaces
Companies like Redefine have adapted their industrial portfolios to align with this trend, stressing modern logistics and high-tech industrial assets geared towards supporting supply chain functions such as distribution and warehousing, according to Nell.
These advanced industrial spaces are prevalent in strategic locations like Gauteng, the Western Cape, and KwaZulu-Natal, catering to the evolving needs of the market.
Moreover, the surge in data consumption driven by e-commerce, remote work, and technological advancements has spurred demand for data centres. These facilities, predominantly situated in Gauteng and the Western Cape, require substantial land and energy resources, reshaping the industrial landscape.
Addressing Sustainability Challenges
Nell says that in light of challenges such as electricity and water supply constraints, tenants seek sustainable and sovereign industrial spaces capable of operating independently from municipal infrastructure.
Measures like solar PV installations and LED lighting not only enhance energy efficiency but also ensure uninterrupted operations during infrastructure disruptions.
Sustainable Real Estate Opportunities
He says that while some companies opt to purchase industrial spaces they occupy, managing real estate portfolios may not align with their core objectives.
Partnering with real estate firms specialising in sustainable infrastructure allows businesses to focus on their operations while benefiting from efficient and eco-friendly spaces.
By leveraging well-positioned nodes and collaborating with sustainability-focused real estate partners, companies across various sectors, including online retail, can thrive in the evolving South African market.
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