The freight trade press in Europe, and particularly the UK, have been carrying lead stories on the volumes of available freight warehouse and office space that has flooded the market since the start of the global crisis. Not only have they been reporting vacant, currently unwanted space, but also the virtual demise of the spec building market in warehouse depots in particular – as freight companies slap the brakes on future capacity investment, with their volume turnovers going for a loop. Is this the same case in SA? FTW asked David Alcock of major SA property management company Broll for his views in the matter. The best illustration of the SA freight property market, he said, was Broll’s own graphs for warehouse space availability, and the unit rentals achieved. “Although it’s only an indicator,” Alcock added, “it gives a representative reflection of the overall market movement.” With the global crisis having hit its peak in about August last year, the figures show the before and after effects on the vacancy levels in the national industrial market. Looking at large warehouses of 2 000-m2 plus in size, the Broll statistics showed a vacancy of 300 000-m2 in the first quarter of 2008. It went on a steady upward curve from there, to hit 600 000-m2 in the first quarter of this year. Gross rentals achieved in the Gauteng industrial nodes for these large warehouse units, meantime, was at R38/m2 in the first quarter of 08; rising to R42/m2 in the third and fourth quarters; then starting on a downward move back to R40/m2 by the first quarter of 09. The reason for this drop, said Alcock, is primarily that the prices of major building materials (like steel) have gone down – with the overall building cost diminishing by about 10%. Asked for a forecast, Alcock prophesied that availability could remain high for the meantime; rentals would continue to drop, and the global economy could be expected to start on an upturn in 2010. Till then: “Vacant warehouse space freely available! Keen prices!”
