South Africa’s industrial warehouses are fuller than they’ve been in 25 years, as demand for logistics space continues to grow, says leading logistics facilities firm Equites.
"I’ve been involved in industrial warehousing in some way or form since 2000, and we’ve never had this level of vacancy," said Equites Property Fund CEO Andrea Taverna-Turisan.
At its interim results presentation, Equites reported a 1.5% vacancy rate across its South African portfolio in August, which has since fallen to just 0.3%, while the national sector vacancy sits at 1.9%.
The group’s industrial rentals now sit roughly 25% above 2019 levels, which Taverna-Turisan attributed partly to low vacancy rates and limited available land. "You’ve got a lack of new land being made available for industrial development — especially on scale."
As a result, land already rezoned and connected to essential services such as water, sewerage, and electricity was becoming scarcer and more expensive.
Taverna-Turisan said while costs had stabilised over the past year, building costs have risen consistently over the last four to five years. "No one’s going to build a building if they’re going to lose money on it."
Even with these pressures, the group remains cautiously optimistic, he said, noting that lower interest rates and growing public-private partnerships could help ease constraints in the sector. "The level of interest and engagement we’ve had with various market players really bodes well for the uptake of the land we have on hand in the not-too-distant future."
Equites controls 47ha of land for development and has access to a further 37ha as needed.
The company delivered strong interim results, with the value of its portfolio increasing to R28.3bn from R27.7bn, and dividends per share rising 3.8% to 69.04 cents.
"The group is well-capitalised and maintains a low exposure to prevailing market risks, positioning it favourably in the current economic landscape," Taverna-Turisan said.
Equites said its earnings also reflected R146m in new acquisitions and R327m spent on ongoing developments, and a notable 4% like-for-like uplift in the value of income-producing assets.
Equites said these gains were partially offset by disposals of UK properties totalling R668m. It said its loan-to-value LTV ratio stood at 37.2% in August and expects it to drop significantly once proceeds from this disposal are collected.
Taverna-Turisan said the sale was a strategic decision, taking advantage of favourable market conditions and reinvesting capital into South Africa, where returns and lease structures offered better growth potential.
Equites said interest in its South African properties has surged, having received development inquiries on 268,000m2 of space over the past 18 months. The group has responded by initiating speculative developments in Gauteng.
Equites reported that it was appointed as the preferred bidder to develop a 90,000m2 distribution facility for a listed fast-moving consumer goods (FMCG) group in Riverfields.
"It’s a big FMCG organisation that is effectively making meaningful steps to improve its supply chain to win market share," said Taverna-Turisan.
Partnering with Tridevco, a prominent landowner in the area, Equites said the project would unlock further land value along the R21 highway, with the estimated R1bn project set to start in August 2026.
Proper use of e-commerce could unlock growth for companies. "For an organisation to be successful here, they probably need to be exploring and investing in e-commerce platforms. But more importantly, to gain market share, you need efficiency that your competitor isn’t prepared to invest in."
Equites pointed to tenants at another Riverfields distribution centre to illustrate this trend. Retail giant TFG Limited operates its Bash e-commerce operations from the facility, which handles about 450,000 shipments per week.
Equites said this helped TFG reduce costs per delivery, shorten lead times from 4.6 days to 2.6 days, and increase product availability from 85% to 92%. "When your clients... are investing significantly in their supply chain, ultimately, the people that feed into them need to step up to the plate, too," said Taverna-Turisan.
"We see real estate as one of the foundation blocks of having an efficient supply chain. We’re going to see demand drivers coming through in the next five years, mainly as a consequence of organisations realising that if they don’t invest in their supply chain, they will lose market share."
Another of Equites’ Riverfields tenants, Shoprite, from which the retailer serves more than 500 stores in Gauteng and surrounding areas, has strengthened its supply chain through consistent investment in a comprehensive network of distribution centres. Equites said this has helped the supermarket chain maintain an industry-leading 98% in-stock rate for three years, ensuring shelves are consistently stocked.
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