Branded business park owner and operator Inospace and Fortress Reit have signed a R1.25 billion last mile logistics partnership to be launched with an initial portfolio of 20 industrial properties in Cape Town and Johannesburg. Fortress contributed 12 multi-tenant assets, with Inospace contributing the rest.
Inospace CEO Rael Levitt
The combined portfolio, comprising warehouse, logistics, storage and workspace, covers a total leasable area of 200,000 m2, with more than 600 tenants. All parks will be branded and redeveloped to provide facilities such as staffed business centers, meeting rooms and commercial warehouses.
According to Inospace, a new range of equipment will be introduced in the parks to help SMEs with last mile logistics, including rigging and lifting equipment, material handling devices, packaging materials, letter printers car and an online courier and shipping platform.
Favorable supply and demand fundamentals
According to Inospace CEO Rael Levitt, the demand for SME-focused industrial space predates the Covid pandemic. “With few multi-tenant mini-industrial new builds in a decade, favorable supply and demand fundamentals have resulted in low vacancy and strong demand from small businesses. We are in a dynamic real estate niche with strong tailwinds that prove structurally resilient.”
The transaction results from a trial with two Fortress-owned properties in Gauteng, which have been successfully repositioned into serviced micro-logistics and business parks named Wadeville Works and Electron Exchange.
Subject to suitable investment opportunities, Inofort may consider opportunities to grow the joint venture’s portfolio primarily by acquiring and reallocating additional assets from Fortress or finding other portfolios suitable for their optimization model.