Developments News

Inospace to launch last-mile logistics hub in Cape Town

Island Works.

Inospace is commencing construction on its next generation 5 000m2 ‘Last Mile Logistics Hub’ in Paarden Eiland, outside of Cape Town’s City Centre.

Previously occupied by a longstanding Inospace client who has moved to a nearby business park, the site will be converted into a distribution hub offering thirty individual units with a host of technology-driven logistics services.

According to Inospace Director, Jacques Weber, “the digitalisation of the retail industry has revolutionised traditional commerce, which has been further realised and accelerated by Covid-19”.

He explains that while South African consumers are increasingly exchanging in-store retail for online shopping, “the expectation of instant gratification remains – consumers demand cheap and fast delivery options. Consequently, distribution hubs for goods in urban areas have rapidly grown. We are starting to see rental growth in inner locations as businesses try to get closer to the consumer and to modernise facilities”.

Last-mile delivery is commonly defined as the ‘last stretch of a business-to-consumer parcel delivery service’ as ‘e-tailers’ implement logistical solutions by securing warehouse and distribution space to house their inventory as close to their customer base.

Demand for last-mile real estate has recently spiked with the desire for quick, efficient delivery of goods to consumers near high density commercial and retail nodes, according to Weber.

He adds that demand has been high for companies to deliver goods into critical commercial and residential nodes. “The wooden-floored new Hub at Island Works has already attracted considerable interest from prospective tenants in multiple sectors”.

The demand for logistics space is not only from big companies looking for large-sized logistics spaces. Smaller spaces, as provided by Inospace, are attracting huge demand from SMME companies who need last-mile logistics space. The company has reported that its occupancy is at 95% and has rolled out a flurry of new parks in Johannesburg and Cape Town.

The original home of Cape Town’s wool industry, Island Works, is steeped in history. The buildings were initially developed in the 1930s and sits right in the middle of an iconic strip between the harbour and the city. The site has many transport links, including the nearby N1 highway. It has maintained a 100% occupancy throughout the pandemic due to its strategic location and demand for logistics facilities near the city.

Inospace acquired the 26 000m2 Island Works in 2017 and it is one of the company’s larger business parks in its 42-site national portfolio.

Now stylishly modernised with contemporary features, whilst retaining its period elegance, Island Works new logistics hub will boast industrial style facilities, an independent coffee shop, architecturally designed lounge areas, and breakout spaces.

The Hub will launch in March 2022, offering staffed reception, meeting rooms, delivery and drop-off areas, and technology-enabled logistics services with its original exposed brickwork will sit alongside eco-friendly facilities.