How will Cape Town's Commercial Sector Cope With its Industrial Growth?
Category Commercial Information
Does the commercial product being offered matter?
Based on my experience over the last 18 months, it would seem there has been an increase in the semigration of business owners from all over the country into Cape town. I have also seen an increase in the demand from entrepreneurs looking to migrate into the mother city.
"Cape Town is where it's at" is the feedback received from one of my larger commercial clients recently. This got me thinking about where the market is at and whether the political and macro-economic cycle has dampened the commercial demand for new premises. It would seem the impact has not been as severe as expected. With more than a million square meters of industrial space being offered 18 months ago, to a very different landscape today, one cannot ignore the ongoing demand that has been created. It would seem there has been a surge of demand for commercial and industrial space. This type of demand, in an ailing economy can only bode well for the future and current growth prospects within the province. There is of course the offset benefit of infrastructure spend from local Government to keep up with demand.
Below are a few examples of the right product being offered to meet the demand currently out there. Richmond Park on launch had 300 000 m² on offer, 18 months later there is 8000m² left.
Jo Slovo Park had approximately 450 000 m² on
offer, this was reduced to 75 000 m². Seems demand for this type of product remains strong. The development when completed, will be a secure industrial estate with 24-hour security, security fencing and manned gate houses. Of the site's
72 hectares, 45 hectares has been earmarked for light industrial business. Units range from 600m² to 100 000m². There is sufficient power to meet low and high use occupiers. The development is ideal for distribution, warehousing and cold storage businesses. Fibre-optic telecoms will be installed on all sites. It is also ideally integrated into the City of Cape Town's Integrated Transport System (including the MyCiTi Bus routes), providing public transport access from Milnerton, Parklands, PlatteKloof and Durbanville.
Recently launched mixed-use developments like Atlantic Hills (also known as precincts) are a fairly new concept in South Africa, these developments are quickly becoming sought-after by both tenants and investors. Atlantic hills is a shopping centre and small office park in close proximity to Canal Walk, this type of development with the infrastructure and access offered, should alleviate some of the pressure in Century City.
The same however cannot be said for Bracken Gate, a development that offers a slight twist on the generic commercial offering. The developer has opted to market his product as a lease-based product and not sell any land off. This may well be a stumbling block to the slow uptake of his product.
It would seem that there is a strong demand for the right type of commercial and industrial product with growth in this sector forging ahead regardless of the macro and political landscape. Whilst it may take some time for the infrastructure to catch up, I remain confident and positive about the ongoing development and growth in this sector. I do however heed caution to creative variations on the commercial front. That said, I agree "Cape town is where it's at ".
May the trend continue!
Author: Danie Antill