SA’s property market is gathering momentum, with industrial real estate continuing to lead the growth in the sector, according to Equites Property Fund.
The outperformance is being driven by strong rental growth, low vacancy rates and sustained demand for logistics and warehousing space — especially in urban logistics hubs, the JSE-listed Reit says in its most recent annual report.
Most developments in the sector have been pre-let over the past 24 months, helping to maintain the supply-demand balance and supporting ongoing rental growth, it adds.
The specialist logistics group, which operates in SA and the UK, raised its full-year distribution guidance to 133.92c a share for the year to end-February — the upper end of its previously communicated range.
Equites announced it invested R195m in upgrades to the Shoprite Centurion facility, extending the lease to 2044 and completed two additional Shoprite projects. Both were secured on 20-year leases. The long-term lease profile reflects rising demand for logistics infrastructure from national retailers, it said.
“Rising development in the logistics space has significantly reduced the land bank in SA; we are actively seeking strategic land to support Equites’ strategy of delivering long-term leases for blue-chip clients,” it added.
The acceleration in development is being driven in part by the explosive growth of e-commerce. Research by RMB projects online sales among SA’s largest retailers are expected to surge from R150bn in 2024 to R225bn in 2025. Such growth is driving the need for targeted investment in supply chains, particularly warehousing infrastructure.
“The sustained double-digit growth of e-commerce, set to accelerate further with Amazon’s entry into the market, will continue to drive demand for suitable logistics real estate to support the viability of these operations,” Equites said.
Industrial property has outpaced all other commercial segments, delivering 15.2% total return in the 12 months to December 2024, according to an industrial property trends report by the SA Property Owners Association.
While the retail sector also contributed to the country’s strong performance, it has trailed behind industrial.
In its analysis and trends report, property market intelligence firm Rode said nominal gross market rentals for 500m² of industrial space rose 7.3% in the first quarter of 2025 compared with the same period in 2024.
“That growth exceeds the 6.7% recorded in the fourth quarter of 2024. Rentals were about 25% higher than the prepandemic level — no small achievement, given the weak economy,” Rode said.
In its recent annual report cement producer PPC says that while market demand remains under pressure due to low subdued construction activity, there are pockets of resilience in the industrial and informal construction segments — supported by strong demand that help offset weakness in the traditional residential market.
That is reflected in the growing activity in industrial developments, particularly in logistics and warehousing, driven by strong sector demand. Growthpoint recently completed the second phase of its Arterial Industrial Estate in Cape Town at a cost of R400m, including the first phase, to meet demand for modern logistics warehouses.
That segment now accounts for about half of Growthpoint’s portfolio in that segment by gross lettable area. The group is also concentrating its investments in higher-performing, high-demand regions of the country, specifically the Western Cape and KwaZulu-Natal, it said earlier this year.
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