The 8,005m² property in Peerless Park, Kraaifontien is currently leased to 22 small and medium-sized companies and will be renamed Peer Works. It will become the company's 18th branded business park in Cape Town.
Commenting on the announcement, Rael Levitt, chief executive officer, said: "Peer Works will be a strategic location for Inospace. It is just off the N1 highway and in the middle of a residential node. We will reposition the park to become a micro-logistics and distribution park that will serve businesses and households in the surrounding northern suburbs.
"We are on a healthy expansion drive now. We are already in Goodwood, Parow and Bellville, which has served us well with almost zero vacancies. We are still looking at more sites in Cape Town's northern suburbs," Levitt said.
Levitt says that Inospace is looking to grow its footprint, with its strategy of 50 sites by the end of next year. "Throughout the Covid-19 pandemic, the uncertain future of the office sector has received market attention, but the industrial market is experiencing a tectonic shift," explained Levitt.
Inospace believes that a range of factors, including online sales, drove growth in the industrial real estate sector before the coronavirus's onset. However, after March 2020, as online sales experienced an explosion in growth, demand for large and small distribution space skyrocketed, accounting for most industrial leasing.
"What's been interesting from an industrial perspective is e-commerce is an incremental driver of additional industrial floorspace demand. That's because inventory typically held in the retail store is now held in the warehouse."
According to Levitt, recent government restrictions do not affect the Inospace portfolio. "Certain clients see the knock-on effects of restaurants and other public-facing facilities closing, but our industrial customer base is open for business. In fact, certain industries, such as transport, delivery, and logistics, grow in these periods," he commented.
"Transport costs are 40 to 50% of most of our tenant's costs. He said strategic locations near highways and urban areas are critical to businesses that deliver products directly to consumers.
“The areas where industrial space is in great demand are close to residential areas," Levitt said. "It's a fascinating time to be in the multi-let industrial sector. The industry is experiencing a complete transformation. Our model of branded parks offering a mixed product range of industrial, storage and office spaces that we overlay with services continues to attract significant user demand.”