The Role of Logistic Parks Development
The many regulations put in place to prevent the spread of an unseen health enemy have had a severe impact on the property sector in South Africa. One area of the real estate sector that has managed to grow despite the economic effects of the lockdown regulations is that of logistics.
Jason Cooper, who heads the Development division for Fortress Logistics has noted that logistics is essential for successful e-commerce operations. He also explained in a recent article (read more here), how investment in the right properties and infrastructure development can aid in the creation of a highly effective supply chain. In line with this, Fortress REIT’s logistic park developments have made it possible for large retailers to rent warehouse space closer to their markets.
Logistic parks remain a priority with Fortress REIT as businesses and industries are adapting to new ways of ensuring they can still sell and deliver products to consumers. Large warehouse spaces close to harbours, ports, airports and markets have become more important than ever. Unlike many other types of real estate where lockdown regulations may have caused tenants to close businesses, leaving vacant properties and thus income losses for property investment funds, this sector has performed well. This is evident in the fact that the vacancy rate in the logistic parks developments of Fortress REIT is kept below 10%. This is impressive considering that the Fortress logistics portfolio is R10 billion.
With several new logistic park developments, Fortress REIT provides real estate investors the opportunity to benefit from the growth in this sector. More than one million square metres of space in secure developments form part of the Fortress property portfolio. An example of the quality, features and strategic location associated with each of the properties is that of the Cornubia Ridge Logistics Park development in KZN.
It is located at the northern part of the new interchange at Cornubia. The park is across the Gateway Precinct with the N2 highway in between. Superb accessibility from the N2 highway that connects all the coastal towns, 24/7 security, facilities with 15 metres eaves height and office blocks, as well as large yard space are features that put this property a notch above other warehouse parks in the province. View more information about the property here.
Another example of the attention to detail, focus on efficiency and consideration for the importance of a strategic address is the Eastport Logistics Park on the East Rand in Gauteng. The development is located just north east of the R25 & R21 intersection, giving it good accessibility to highways that connect with Pretoria, Midrand and the OR Tambo International Airport. As with other light industrial properties in the Fortress REIT portfolio, it boasts 24/7 security and central fire protection facilities. It is close to markets, making it possible for e-commerce retailers to get products to their clients, using the fastest and least congested routes.
Investors and prospective tenants alike benefit from the focus on logistic parks developments that cater to the needs of tenants such as central location, ease of access and state-of-the-art facilities. By meeting these needs, it is possible to ensure high occupancy rates and lease returns.