Tenants snapping up warehousing space

20 Dec 2012

Despite the prevailing economic challenges, an encouraging trend evident in the commercial property market is an increasing number of enquiries for distribution and warehousing space, reports Jonathan Klimek, leasing consultant for JHI Properties in the Johannesburg area.

View of 60 Electron Avenue in Isando, where Jonathan Klimek of JHI Properties has concluded a lease on behalf of ADC Energy.

Klimek recently concluded a lease for a single-tenant building comprising 7 772 square metres of industrial space at 60 Electron Avenue in Isando, on behalf of ADC Energy, suppliers of electrical equipment for the mining and electrical industries.

“Due to expansion of their business, ADC Energy require much larger premises and have taken up approximately 6 000 square metre of warehousing, with the balance comprising offices,” he says.

While they were impressed by the cleanliness and good security of this well-maintained, light industrial property, which is well suited for storage and distribution, a key factor is the location as it has highway frontage onto the R24 and is close to two off-ramps, he says.

Klimek points out that a noticeable trend of late is a concerted drive among larger distribution users to modern, dust-free space with good lighting, all of which is conducive to the storage and handling of goods.

However, this is coupled with the key imperative of being well positioned and easily accessible to key transport routes and off-ramps, as this has a significant impact on travel time and transport costs - all critical factors in terms of logistics.

They also seek generous yard space, for ease of handling and transportation.

Klimek says the enquiries currently received for premises for warehousing and distribution are mainly in the size range of approximately 1 000 square metres and below, or from 10 000 square metres upwards. 

There are also some businesses seeking to rent premises of around 2 000 and 3 000 square metres in size.

Generally the office component of large distribution operations is about 100 square metres or 10 to 20 percent of the total space.

“At present a prime industrial property which is available for occupation is an adjacent building to the abovementioned property at 60 Electron Avenue, at a very competitive rental of R45 per square metre.”

Comprising 17 000 square metres and with its own separate entrance, this property is owned by the same landlord and offers the same excellent exposure to the busy R24 key route leading to OR Tambo International Airport or towards Johannesburg.

With such ideal advertising space ‘free’ with the property, any business stands to benefit through the high exposure and thereby reduced advertising or marketing costs, he says.

Klimek says the timing is ideal for those seeking to rent industrial property as in the current economic climate, landlords are making properties attractive to tenants and offering generous installation allowances and very competitive rentals.

JHI is also marketing an entire building to let which comprises 7 845 square metres situated in Linbro Business Park on the N3 highway.

This A grade, modern building is ideal for a distribution business, and includes offices and a large yard.

Available at a rental of R55 per square metre, which is very competitive for this business park, the property is close to off-ramps and also enjoys highway frontage, providing considerable spin-offs, he adds.

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