INDUSTRIALS OFFER VALUE - Especially if their rentals are fairly priced

Industrial property investment should be a focus, says Heather Farrah, sales director at Strathmore.

“We will always need warehousing, logistics and manufacturing and keeping these rentals at levels that do not dry the operators’ profits is key”.

In terms of good locations for unlocked potential, Farrah says: “Many of my peers would probably say Cornubia. However, our experience in redeveloping and regenerating the older arears of Pinetown, New Germany and the South Basin, due to location to arterial routes and proximity to the port, shows these to be far more bankable investments”.

The challenge though, she says, is again keeping rentals realistic.

The city of Durban and peripheral arears, such as South Beach and lower Morningside, also offer potential value for industrial and commercial opportunities, says Yianni Pavlou, company principal at Portfolio Property Investments.

“The South Durban industrial basin and conversion of un-let commercial space into bespoke residential conversions are also favourable investments themes at the moment” says Yianni Pavlou.

Furthermore, there has always been a great demand and limited supply of mini factories- from 250 sqm to 100 sqm.

Keith Chetty, commercial manager at Chas Everitt, says investing and developing these types of properties will “always be the safer investments with the best returns”.

Stand-alone properties with previous residential zoning in arears such as Morningside and Musgrave are becoming increasing popular for restaurants and businesses, Chetty says, adding that this gave them good value for money.

Overall, retail, office and industrial properties in KwaZulu Natal all still offer opportunities, despite the uncertain political climate and weak economy, says Growth Point Properties’ Greg De Klerk.

He says while property investments, like other asset classes, will experience “both good and weak cycles”, commercial and residential property remain good investments.

“This has been proven over many years, provided your investment horizon is at least 10 years or longer”.

De Klerk says KZN also has a shortage of well- located industrial land, and existing traditional industrial arears, and existing traditional  industrial arears offer “limited development opportunities “, forcing developers to look further away from Durban, particularly Hammersdale.

“For example, Mr Price has completed a development in this node of their 55 000 sqm distribution centre” he says.

Courtesy: The Independent on Saturday

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