Warehousing and logistics property developer Improvon is constructing a major business and logistics park for a whopping R1.3 billion.
Improvon, with an asset base of R9 billion across in South Africa and other sub-Saharan countries like Kenya and Zambia, in February, broke ground on a new facility, the Dakota Precinct at Rand Airport commercial park in Germiston.
The total development cost is estimated at R1.3-billion. Project financier Nedbank Property Partners, which is part of the Nedbank Group, SA’s largest commercial property financier has also taken a 35% stake in the development, with Improvon owning the balance.
Despite South Africa’s weak economic climate outlook, demand remains stable for prime warehouse and logistics assets, with logistics facilities remaining the best performing commercial asset class in the country.
The project will be split into five phases with a combined land area of 250 000 m2. Phase 1 of Dakota Precinct is expected to be completed in September, offering 7 600 m2 under roof, which will ultimately increase to 13 000 m2 of A-grade logistics and warehouse space.
Speaking at the ground-breaking, Improvon CEO Stefano Contardo said the strategic location of Rand Airport makes it unique from a logistics and freight point of view, with easy arterial access to the N17, the N3 and the R21.
Contardo noted that the company’s investment was underpinned by its positive outlook for the warehousing and logistics niches.
“We looked at the ability to grow in the South African context, the South African landscape, and we’ve tried to translate that into the sub-Saharan market space; and we’re seeing good momentum building, especially in Kenya.” he said.
While these were constrained by the Covid-19 pandemic, they were not as hard hit as the rest of the property sector, and Improvon is bullish about further developments owing to factors such as growing e-commerce and decentralising of warehouses globally.
The development was also welcomed by a representative from the City of Ekurhuleni.