When developing an industrial property, location is the most important factor. Most of the industrial areas within a 15km radius of Cape Town are fully developed with no vacant land available, with the exception of the Airport industrial node where there are still a few large parcels of land for development.
When you are considering developing industrial property, land price is an important factor, however, it is important to understand that the construction cost remains the same wherever you build around Cape Town. Construction cost is a much higher component of the overall development cost, so from a long-term investment point of view, it makes sense to build in the best possible location. For example, an industrial property located on the R300 industrial property node should achieve good growth as this is arguably Cape Town’s best location for major logistics companies to position themselves. This is due to the R300 being the major arterial road linking Cape Town’s Northern, Southern and eventually West Coast suburbs on one highway. It is difficult to find well-positioned industrial land in Cape Town that is not under power lines for under R1400 per m².
For companies that can locate further than 15km from the Cape Town, the two main developing nodes are along the West Coast growth corridor and along the R300 Highway. The growing industrial areas on the West Coast are Richmond Park, Atlantic Hills and Rivergate. Along the R300, the growing industrial areas are Brackengate 2 and Bellville Industrial Park. With the exception of Bellville Industrial Park, the land is not available for sale in these areas, however, landowners are readily available to develop turnkey solutions for tenants on long triple net leases.
