Scarcity and demand fuel Cape Town, Durban industrial property boom

SOARING demand and limited land are making industrial and logistics properties in Cape Town and Durban highly sought after by investors. While global supply chains are being reshaped by e-commerce and climate risk, these two cities have become key investment markets in Africa due to their resilience and strategic appeal.

Cape Town’s market is thriving, with rising rents and low vacancies driven by strong governance, limited land, and an influx of people from other provinces. According to Shane Howe from Cushman & Wakefield | BROLL, demand is fueled by a “flight to quality” and the expansion of e-commerce. Development hotspots are expanding in areas like Brackengate, while gentrification is unlocking opportunities in older nodes.

In Durban, chronic land shortages and high operational costs have created a market that favors landlords. Anthon van Weers of Cushman & Wakefield | BROLL notes that viable land is scarce, and vacancy rates are at historic lows. While municipal rates are high, Durban remains attractive to investors due to stable demand from logistics operators located near the port, which offers a significant cost advantage.

Both cities are experiencing accelerating rental growth, especially in areas with high demand and low supply. This trend signals a unique opportunity for strategic investment. The value of logistics and industrial assets is now increasingly tied to their resilience and future-proofing, with investors and tenants considering factors like water security and energy independence. This shift aligns with global best practices, where climate-resilient assets are achieving stronger lease uptake and higher returns.