Property investment in warehousing and related logistic services is expected to increase substantially provided that a significant drop in the cost of local data is secured, a Stanlib portfolio manager has said.
Although online retail sales in South Africa are still slow compared to a country like the UK, where at last count around 30% of consumer activity is conducted online, tech pundits are predicting massive growth in the online warehousing space.
According to analyst and property manager at Stanlib, Ahmed Motara, “most large diversified real estate investment trusts would want to have some exposure to industrial property, particularly on the higher-quality logistics and warehousing front.”
Motara’s sentiments have also been confirmed by Arthur Goldstuck, owner of tech research company World Wide Worx.
He indicated that growth in the infrastructural warehousing space was inversely proportional to lower data costs.
Unfortunately politics will, as usual, have a say too and no fireworks are expected from listed property companies.
Significant capital investment required for warehouse construction will, at least for the time being, take a backseat as property developers adopt a “look-see” approach as South Africa is in an election year.
The weakened economy is also not currently conducive to big-ticket infrastructural spend projects.
But demand for online supply support will not go away anytime soon, and with an expected increase in online orders, volumes will most likely necessitate the expansion of warehousing services.
