OVERVIEW
Construction and property Covid-19 has shaken up sector priorities.
C
ovid-19 provided a sharp shock for many business sectors, but with the move towards working from home accelerated by the pandemic, none is going to have to look harder at its models for sustainability than the office rental sector. Logistics, often taken for granted in normal times, became an even more important component of the supply chain during the global lockdown and in the months that followed, with the second half of 2021 characterised by blockages and delays. In that context, the news that Fortress REIT had successfully let more than 100 000m² of logistics space in KwaZulu-Natal, was significant. The company also announced its intention to develop more than a million square metres of logistics assets over three years, transforming the weighting of its portfolio to two-thirds logistics. Fortress’s Clairwood Logistics Park, which has port access, signed up two big clients in 2021, Kings Rest Container Group and African Sugar Logistics. Fortress’s new Cornubia Logistics Park (pictured) has the advantage of being near the King Shaka International Airport. The same locational logic applies to Eastport Logistics Park, which is close to OR Tambo International Airport in Gauteng, where Fortress has signed its biggest logistics development to date, a joint venture with Pick n Pay which is establishing another inland distribution centre. The clients of Equites, a company which focusses on logistics property, include Amazon, Super Group, HDL and DSV. Equites is the only specialist logistics property company listed on the JSE. In six years, its portfolio has grown from R1-billion to R15-billion. There are more than 30 real estate investment trusts (REITs) on the JSE and they generally deliver good value. FNB, which publishes a regular property barometer, has done an in-depth analysis of previous crises to help understand what may
ONLINE RESOURCES Construction Industry Development Board: www.cidb.org.za SA Reit Association: www.sareit.co.za South African Property Owners Association: www.sapoa.org.za
SOUTH AFRICAN BUSINESS 2022
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SECTOR INSIGHT Logistics property is on a growth path. occur in the post-Covid property market. According to John Loos, a property strategist at FNB Commercial Property Finance, the most vulnerable sector is likely to be Retail Property. Smaller neighbourhood centres, with more essential items and greater convenience, will be less vulnerable. Statistics SA has found that the percentage of South Africans living in flats has risen markedly. Whereas 26 out of 100 approved plans in 2013 were for flats, this figure reached 59 in 2016. Although the total number of people living in flats is still relatively small (5.4%), this figure will rise as urbanisation increases. An innovative scheme to build a new township in Gauteng is backed by a retirement fund. The Transport Sector Retirement Fund is building an integrated settlement in the Sedibeng District Municipality south of Johannesburg. The R2.7-billion development includes a shopping centre and will include a mix of housing types. ■
