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Redevelopment Of Redundant Industrial Buildings

by johnfloyed

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Property investment in general happens to be a frequent vehicle among the 3 support beams of ones' investment portfolio along with stocks, bonds and funds types. Some traders still prefer tangible opportunities even when the yield is slightly less than options.

Sometimes a brand new investor will become familiar with by learning from mistakes of some issues and pertinent information that could have aided within their making decisions processes.It's because of this that we'll make an effort to keep our clients informed of problems that are regularly debated within our travels as industrial and commercial property brokers.


Because the logistics market is a natural concept and develops and changes to adjust to convenience and demand, it makes sense how functional ability of commercial rentals are integral within the making decisions procedure for a potential tenant.

The main criteria within the making decisions process is ale the home to look after access, loading and offloading of container type automobiles. This really is understandable because the box or container is definitely an worldwide used mode of cargo handling.

When we think about the port like a separate animal altogether using its rules, rules and restriction criteria when it comes to leasehold possession, we will have to concentrate on the freehold property falling inside the acceptable perimeter from the harbour surrounds for the discussion.

The Umbilo and Congella Industrial Sector:

The interest in space is really a consequence of consumption. In the1980's, the Umbilo area had multi-directional traffic flow on Gale Street, Umbilo and Sydney Streets that was considered within the access the perception of most qualities and it is noticeable through the curves of some building facades facing within the wrong direction to standard traffic flow. It has negatively affected the loading/offloading and parking facilities of numerous qualities. The move to container trucks like a preferred way of transport in the formerly used rail system has produced an outburst in traffic jam that is apparent in Bayhead Road and South Coast Road at specific occasions during the day.

It is acceptable to many, to offload containers in the pub in closeness for their premises since many older qualities are overbuilt when it comes to their coverage, thus stopping the circulation needed to deal with container cargo on-site.

The answer:

When we think about the rental rate being billed to accommodate your logistics enterprise within the new River Equine Valley sector or inside the leasehold sector from the port, it's acceptable to pay for a relatively elevated rental rate per square meter for any recently built structure integrating a circulation configuration on the website for container traffic and loading/offloading facilities.

With this thought, to become nearer to the main harbour should command reasonably limited for location because it is apparent within the cost towards the consumer of freight transportation in compliance towards the zones allotted through the logistics industry.

Let's explore a hypothetical scenario of the 3 storey building in Umbilo situated on the 2000 sqm site and created to cover the whole site. Considerations haven't occurred for building lines etc.

Scenario 1:


First floor - 2000 sqm at R35/sqm

Bottom floor- 2000 sqm at R16/sqm

Second floor 2000 sqm at R12/sqm

Thus our 2000 sqm site ( as land ) is producing R63/sqm in rental.

It's obvious out of this exercise this site would bond with R115/sqm if your build price of roughly R 4000 per sqm was believed for any new structure because the services already are on-site. Thus a non-viable choice.

Scenario 2:


Just one storey structure of 1000 sqm on a single 2000 sqm site

First floor 1000 sqm at R35/sqm

Thus our 2000sqm website is producing R17.50/sqm

When we rebuild a 1500 sqm facility at R4000 per sqm and assume it requires R40/sqm to service the funding and add our initial lack of R17.50/sqm, we are able to go into the market having a completely new facility with container access at approximately R 57.50/sqm and most likely still have a very good selection of tenants because of the place needs as mentioned above.

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