Inospace has acquired two last-mile logistics properties at Cape Town International Airport for a total cost of R35 million from a private investment fund.
Located in Airport Industria, across the road from the airport and less than 20km from Cape Town CBD, Sky Park and Alkin Park properties are fully let to twelve logistics, warehousing and/or light-manufacturing tenants.
The parks, jointly measuring 16,118m2,will be rebranded and renamed Sky Works and Fly Works and will be integrated into Inospace’s growing network of sites.
According to Inospace’s Chief Investment Officer, David Bernstein, the well-located asset, acquired on an attractive forward yield of 12%, is in a node where data shows extremely high tenant demand.
Bernstein says Inospace has continued to grow despite interest rate headwinds. Since the beginning of the year, Inospace has acquired close to 200 000m2 of industrial park across 16 assets in Cape Town and Johannesburg.
“While we are cautious about rising interest rates, we remain focused on our growth strategy. We are now finding it easier to acquire higher-quality assets at more aggressive yields.”
Valuations have cooled down over the last two months as interest rate hikes and load shedding have taken their toll on acquisition yields and investor sentiment.
“If we continue purchasing well-let quality properties at prices between 50% and 60% below replacement value, we will remain one of the few locally focused high-growth property groups.”
Bernstein says they remain positive about the long-term outlook for the last-mile logistics sector. At the same time, they remain conscious of negative risk factors, such as load-shedding, inflation, and the concerning interest rate outlook.
“We see growth opportunities in a contracting economy and, while the airport may well be the exit point for many investors, we see it as the entry point for untapped investment opportunities.”
