Inospace acquires R91m Midrand property from Vukile Property

The property was purchased at a rate of R4,200 per square metre, containing 21 330 square metres of lettable area under roof that offers space for small warehousing, logistics, storage and light manufacturing. In keeping with Inospace's investment criterion, 92% of the area will be let to a mix of SME tenants, a rate reflective of mini-industrial leasing activity locally and abroad.

Located across the road from the Dischem head office and under 5km from the Mall of Africa, the park will be renamed Allandale Exchange and refurbished with value-adding facilities that integrate with Inospace’s growing network of properties.

"This well-located asset acquired on an attractive yield is a property where we see potential to add value through our innovative business model and asset management initiatives. Midrand has a solid and diverse SME sector of which Inospace has good knowledge," says David Bernstein, Inospace's newly appointed Chief Investment Officer.  

Occupying a 4,5-hectare block of land in the heart of Midrand, Allandale is a bustling business node situated along the N1 highway between Sandton and Centurion. Midrand has experienced strong growth in the last decade, mainly due to the Waterfall City development, a 2 200-hectare precinct, which has been developed by property group Attacq. The market value of all completed buildings in the area is now estimated to be between R50 billion and R60 billion.

"Midrand is a strategic nodal focus for Inospace. Our latest acquisition is in an excellent, high-profile location. We already have three other bustling logistics parks in the suburb and have seen strong rental demand in the area," adds Bernstein.

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A year of continued growth for Inospace

Since the beginning of the year, Inospace has acquired 152,000 square metres of industrial parks across 14 assets, representing a total investment volume of R826m. Inospace's latest acquisition produces a total annualised rental income of R17,5million through 92 tenants. The company will grow revenue through its various asset management initiatives.

"Our parks have not been negatively affected by the economic environment or recent load shedding shocks. Our model of creating flexible leases, value-added services and attracting last-mile delivery spaces has seen strong customer demand and growth in the last quarter," says Rael Levitt, CEO of Inospace.

Smaller industrial and last-mile logistics real estate have been insulated from the economic shocks to the local and global economy due to the growing demand for small quality warehouses and distribution centres. This fact, coupled with the online sales boom, has seen the industrial segment outperform the other classes in the property market.

"If we continue purchasing well-let quality properties at prices 50-60% below replacement value, we will remain one of the few locally focused high-growth property groups. We are positive about the long-term outlook for our sector. Yes, we are conscious of all the negative economic factors and risks, including inflation and the interest rate outlook. But while many South African investors run to the exit door, we have found our niche by going in the opposite direction." says Levitt.