Thursday, September 20

A new market is taking off

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Cape Town shows big promise for airport-centric economic activity

Known as an aerotropolis, this market is widely defined as a metropolitan sub-region where the layout, infrastructure and economy are centred on the local airport. In Cape Town, this area is posed for continued growth.

Cape Town is one of the most visited cities on the African continent, and Greg Nafte, co-director of Nexus Property Group, says it holds promise for significant growth and airport-centric economic activity. Signs of this have already been seen in recent years.

He says the rising demand for property in industrial nodes surrounding busy airports is due to the increasing value placed by investors on a property’s proximity to key infrastructure and transport nodes.

“We’re seeing an increased demand from investors and owner-occupiers for industrial property, such as logistics, warehousing and distribution centres, in industrial nodes surrounding major airports as these areas are promising strong capital gains and are showing signs of major future expansion,” says Nafte.

Cape Town International Airport’s location in the centre of the Cape Peninsula offers quick access to the harbour and Cape Town CBD. GDP Industrial Property’s Guy de la Porte says the airport is attracting “big box” warehouse users such as Imperial Logistics, which, even if it does not use the airfreight terminals, finds it a good location for logistics.

Couriers and businesses operating in air freight, air logistics, car hire and airport support services also need to be located next to the airport, he says, adding that the Cape Town aerotropolis is also becoming a popular destination for office users due to its central position between the Cape Town CBD and Stellenbosch/Somerset West.

Demand for property surrounding airports is due to the increasing value of a property’s proximity to infrastructure and transport. Picture: Pexels

In terms of future expansion, De la Porte agrees the airport city precinct will “grow significantly” in the future as it has the largest amount of zoned vacant land for development close to the harbour, CBD, airport, major industrial areas, and labour and transport links.

“Office demand will also increase and there will be a need for retail to support the industrial and office markets.”

He says the Road Lodge was the only hotel close to the airport before the development of the “highly successful” Hotel Verde, and another hotel is planned close to Execujet Private Airport.

Last August, an investor prospectus for the development of the Airport Company South Africa-owned 16-hectare halaal industrial park, next to Cape Town International Airport, was released. According to the report the vision is to “develop this well-positioned land into a strategically located halaal hub that leverages off its proximity to the airport”.

The specialist park that is envisioned to be, in its entirety, certified for world-class halaal production is uniquely positioned to be an air freight hub.

Although it will primarily facilitate the movement of goods, there are also opportunities for value-adding activities and low-intensity production which does not require large amounts of space.

“This will most likely entail products of an artisanal nature and be high-value low-volume products such as food delicacies with short shelf lives and not staples or commodity type products.

“In primarily facilitating movement of goods, the focus of the hub will be warehousing to enable distribution, value-add activities such as packaging and containerising, and logistics services to assist with customs processing and exporting,” the document said.

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