Investment drives into industrial property solutions focusing on distribution centres.
It has long been documented just how much e-commerce is impacting the operations of businesses in the retail property sector, both locally and nationally, but research by Cape Town-based commercial property consultants Baker Street Properties shows how much the city’s warehousing sector is being, and will be, affected.
Dave Russell, director of commercial leasing at Baker Street Properties, says as more people turn to e-commerce as a means of purchasing, the delivery of goods to customers against ever-growing expectations on service, quality, time and speed is driving “significant investment” into industrial property solutions, with particular focus on distribution centres.
“The on-demand “That means the location planning of distribution centres and vertical integration become significant priorities. Therefore, industrial property will adapt as supply chains become more consumer-centric and transform into ‘demand-chains’.”
Predicting its impacts, Russell says there will be a rise in demand for city-based warehouses and more distribution centres between commercial nodes to cater to “last-mile” delivery needs.
“In Cape Town, the Woodstock, Salt River and Observatory nodes have already seen a rise in demand for industrial operations close to the CBD. Industrial property developments with associated efficiencies, greater height and accessibility have also seen increased investment from e-commerce brands in the Cape Town market.”
In addition to warehousing, Russell says e-commerce brands have a significant dependency on human capital, requiring a variety of specialised digital expertise, so growth is also seen in the city’s office sector.
“Major technology companies are well-known for significant investment into workplace conveniences to help attract and retain the best tech talent.
“While South Africa is still no Silicon Valley, Cape Town is a preferred location for these companies, providing superior lifestyle benefits and quality of life – comparable to California.”
It is not only particular sectors adapting to the rise of e-commerce, but also entrepreneurs and small, medium, and micro-sized enterprises (SMMEs) which, according to Kevin Tucker, chief executive at Price Check, are the catalysts to economic growth and development in South Africa.
“E-commerce represents a fundamental change in the way trade is conducted and offers a new, more efficient way to connect producers and merchants directly to customers everywhere, bridging the gap between demand and supply,” says Tucker.
Cape Times Property