Following the success of Cornubia Industrial Park north of Durban, Plumbago Business and Logistics Parks on the R21 adjacent to Pomona in Gauteng and other industrial parks which property development company, J.T. Ross has successfully delivered to the industrial and commercial market, evidence of their understanding of this type of property investment is clear. As with most purchases there are a host of considerations to be made and Development Director, Grant Smith, shared his ideas on some of the significant factors to consider when purchasing industrial property or entering into a lease agreement for industrial space.
If looking to relocate an existing business to new industrial premises look at the respective features that will be required specific to your business i.e. size, zoning, clear internal ceiling heights, entrances, whether internal or external docks will be required, etc.
As with residential real estate, the adage of “location, location, location” is also true for industrial property. Consider the location of each property viewed and how it will impact on employees, suppliers and customers, not forgetting to note the general surrounding area or environment, as this may well effect future resale value.
Access to Staff
A crucial component is whether the business has access to skilled staff and whether the premises are accessible to people most likely to work in the business. In the case of a relocation, will existing employees be able to amend their commuting route to get to the new premises?
Municipal Utility Costs
Check on the property rates in a particular area as well as electricity, water, sewer, refuse and any other utility costs.
Parking and Storage
Should additional storage space be needed, ensure that the premises have sufficient land or space within the property to accommodate storage items. However, consider those items that may not be stored externally as it could be in contravention of municipal by-laws.
Parking is more often than not at a premium and best to ensure sufficient for staff, suppliers and customers if possible.
Generally speaking, between 10% to 15% of the space in industrial premises will be allocated to office space, and whilst this may vary related to particular needs, it is prudent to ensure that there is adequate space to allow for a hassle-free move.
Factory or Warehouse
These words are often used as one and the same, when in fact the two are different in function and design. They may well compliment one another but have their own functions.
Factories are based on industrial sites and consist of buildings and machinery for manufacturing or processing of materials. Often located near major roadways or rail infrastructure for easier transportation of goods, and in some instances a component of warehousing is included for storage of completed goods or assembly parts needed for manufacture. They generally have better power availability, lower roof heights and smaller yard areas.
Similarly, warehouses are located in industrial areas on good major or arterial routes but store a variety of products from finished goods to parts to material and equipment for manufacture. Yard, roof height and floor loading requirements are critical to the success of warehousing.