Inospace has marked its seventh consecutive year of achieving over 10% like-for-like rent roll growth.
The privately owned company, which operates an R1.3 billion joint venture with Fortress Real Estate Investments, reported an overall rent roll increase of 12.2% for the quarter ended August 2024 with 7.2% on a like-for-like basis, maintaining a robust cash collection rate of above 95% for the quarter.
Inospace has seen a sharp rise in its Net Operating Income (NOI) of 18% with occupancy rates across its portfolio nearing 96%. The company remains focused on recycling capital, identifying R564 million worth of assets ready for sale with R205 million sold in the last quarter alone.
“We’ve seen strong interest from investors in acquiring our branded properties while we continue operating them as the blue-chip tenant. This model allows us to reinvest capital profits into new growth opportunities. Recycling capital is one of our key strategies,” said Rael Levitt, Inospace’s founder and CEO.
The company’s innovative business model provides flexible, serviced spaces for small industrial, logistics, and e-commerce businesses. Founded in 2017, it transforms traditional industrial assets into dynamic logistics parks which offer a blend of spaces and value-added services tailored to SMEs.
In the past six months alone, Inospace has signed 101 new leases and renewed 525 client contracts.
The R3 billion Inospace portfolio continues to grow, powered by its tech-enabled leasing platform, Lisa, which streamlines leasing processes, offering digital workflows, integrated tenant services, and real-time analytics that enhance client experience and operational efficiency.
“Technology is central to our growth,” Levitt emphasised. “Last year, we launched an e-commerce fulfilment and scalable warehousing service in Cape Town. Many tenants need scalable space to manage seasonal fluctuations, while others require smaller showrooms or offices with outsourced e-commerce functions.”
This value-added service has become highly profitable and created significant new revenue streams for the company. Inospace plans to roll out its logistics services and courier aggregator to other sites. The company was recently appointed as an official Takealot partner, offering courier services to its fulfilment clients.
Inospace’s joint venture with Fortress Real Estate Investments Limited, Inofort, has been another key driver of the company’s growth. The partnership, covering 20 industrial parks, delivered impressive results, including a 17.5% increase in NOI and a 12% rent roll growth, with occupancy rates reaching 95.7%.
“The success of Inofort reflects the strength of our collaboration with Fortress,” said Levitt. “The consistent performance and rising tenant demand highlight the effectiveness of our strategy.”
Inospace has committed over R1 billion to new acquisitions, focusing on expanding its footprint in high-growth areas of the Western Cape. Recently, the company acquired the Telkom telephone exchange on Cape Town’s Foreshore, located at the entrance to the V&A Waterfront. This prime location will be transformed into a city-based last-mile delivery and storage hub, providing vital services to businesses and entrepreneurs in Cape Town’s central city and the nearby Atlantic Seaboard. The company is also expanding its footprint to the booming Stellenbosch and Paarl suburbs, where it has seen enormous demand.
Cape Town has emerged as a major growth area for Inospace, with rental growth outpacing other regions and occupancy rates approaching 100% across its parks. “Cape industrial rentals will soon reach rates close to R100 a square metre. Yet our biggest challenge in Cape Town is a shortage of space,” Levitt noted. “We’re actively seeking new sites to meet the rising demand.”
In the last two quarters, Inospace has prioritised driving operational efficiencies and reducing operating costs. As a result, the company saw its profitability increase sharply. To strengthen its leadership team, Inospace welcomed new CFO Nick Shabason, while David Bernstein was promoted from Chief Investment Officer to Chief Operating Officer.
Looking ahead, Inospace remains optimistic about its continued expansion in South Africa and beyond. The company is exploring additional value-added opportunities, including reinvesting in strategic assets to support long-term growth.
