ONLINE shopping was just gaining momentum in South Africa when the global pandemic hit, disrupting value chains and logistics around the world. As a result, there has been a massive acceleration of e-commerce, which has in turn created a need for smaller distribution centres located close to residential areas.
In anticipation of the impending shift towards so-called micro-fulfilment centres with only the most popular products that can be replenished easily, business park operator Inospace began aggressively pursuing a strategy of setting up small-format, industrial-based parks targeting urban neighbourhoods where large stores would not be viable. “With their relatively low-cost structure, these business parks provide an avenue to introduce new products and brands with relatively low investment,” Rael Levitt, Inospace founder and owner, explains. “Many have signed our unique InoLease that allows a tenant to exit within 30 days,” Levitt adds.
This month Inospace launched its first business park in the southern suburbs, transforming a derelict industrial site in Wetton into a multi-let, small-format logistics park servicing 35 tenants, ranging from food production to online retail. The 7 500 m² site in Mercury Crescent, which was vandalised while standing vacant and which has been extensively refurbished, is one of three new acquisitions by the company in Cape Town. “Wetton Works has already attracted a wide range of tenants who are in the distribution and logistics business. They will have access to a variety of services, including a manned reception area, meeting rooms, a free business hub and a trendy coffee shop.”
“Our first southern suburbs business park is a case study of change of use from an office block into an industrial site,” says Inospace Operations Director, Jacques Weber. “The building originally housed a small warehouse for storage, but 80% of the lettable area was double-storey offices.” It illustrates how business parks in urban areas can provide a ready flow of goods to retail locations within short distances, for final-mile delivery.