Consider the wider context, advises property developer
THE FREIGHT industry will need to change its mind-set with regard to warehouse rentals charged around the port and airport in Durban.
That’s the view of Colliers International’s Deena Yagan who specialises in the development of these strategic properties.
“The infrastructure in Durban is old - much of it in excess of 30 years - and it costs a significant amount of money to renovate and refurbish to current standards.”
According to one industry source, a blue chip company recently spent over R3m repairing the roof of its warehouse, the cost of which would need to be factored into the rentals.
Warehouse rentals for older, existing properties currently range from R14 - R21 a square metre, and that’s the charge to which the industry has become accustomed.
“If we were to develop a new facility, the cost of the mere structure would start at R28, but the facility could be custom-designed,” says Yagan.
“We believe that the ultimate advantages in terms of increased productivity and proximity to the port and clients should be factored in to offset these additional costs.
“Building costs have increased substantially over the years, and in order to meet the increasingly sophisticated needs of the logistics industry, increased charges will clearly need to be addressed.”
Supply and demand for land around the port is also an important factor to consider, says Yagan. The Maydon Wharf and Bayhead area is totally saturated which creates demand further afield.
One needs to look not only at the distance travelled, but the time spent on the road. The closer one is to the port, the greater the congestion.
