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SAPOA: SA’s industrial sector records lowest vacancy rate since 2007

Industrial real estate was the top-performing sector during H1 2024, with a total return of 11.2% driven by strong occupier demand and the lowest vacancy rate since 2007, according to SAPOA’s Industrial Property Trends Report for H1 2024, a new addition to its quarterly research publications.

Investor allocation to industrial property over the past five years has remained stable with capital increasingly directed towards distribution centres. The performance spread of industrial total returns has narrowed since 2020 with a smaller interquartile range indicating a more uniform market upswing.

During 2023, the main driver of capital growth for industrial real estate was 5% growth in net operating income (NOI) despite a negative impact of -2.5% from yield change.

While operating costs for properties rose to 43.1% of growth income, the industrial sector was the only asset class to record NOI growth over the past five years.

The growth of e-commerce has boosted demand for distribution centres with SA’s online retail sector growing by 29% in 2023, reaching R71 billion.

Challenges at SA ports and a production capacity utilisation below 80% have impacted the manufacturing sector, shifting investor focus on distribution and logistics assets.

Deal volume in the sector has also been strong notwithstanding the muted levels of transaction activity in the commercial real estate sector. Industrial property accounted for 23% of overall deal volume for transactions exceeding US $2.5 million during the five years ended December 2023.

For more detailed information on SAPOA’s latest Industrial Trends Report, download a free copy of the latest report here (free to SAPOA members only).

How to access SAPOA’s reports:

  • Visit
  • Login/register on SAPOA Members 
  • Click on ‘Reports’
  • Click on ‘Free Reports’
  • Click on ‘Office Vacancy Reports’

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