Old industrial buildings on city fringes are getting a new lease on life. Situated on major transportation routes for people and goods, they are being remodeled into modern mixed- use business centres in which clients share a range of free facilities to reduce the amount of space they require. Rentals are between 30% and 40% lower than in traditional retail and business nodes.
Established in March this year and already with R550 million of assets under management, Inospace Property Fund has already acquired 70 000 sq metres of large mixed-use commercial real estate assets which offer flexible workspaces, light industrial, offices and storage spaces in Johannesburg and Cape Town, with another 35 000 sq metres scheduled for completion before the end of the year. .
With six branded business centres – one in Sandton, Johannesburg, and five in Cape Town — Inospace recently completed the acquisition of three industrial buildings in Cape Town: the Island Centre in Paarden Eiland from Ascension Properties for R115m; the 12 500 sq metre Moirs baking powder site acquired from Pioneer Foods and the 20,000 sq. metre renamed Maitland Business Exchange from Investec Property.
“We’re moving into a shared economy,” says Inospace CEO Nicholas van Eeden.
“Operating a business is becoming extremely challenging. Economic conditions are tough and businesses have to keep a tight rein on costs but traditional commercial property nodes are becoming congested, expensive and under pressure due to residential conversions. Working from affordable modern work spaces with free shared facilities on the urban edge just makes good business sense for our clients.”
The aim, explain van Eeden, is to develop a commercial community among tenants, whom Inospace stringently refer to as clients, within each business centre. The group’s fast growing network is being promoted as a means to foster collaboration and trade. Inospace facilitates regular networking opportunities and communication channels in each centre, including a soon-to-be-launched app, that provides information on businesses operating in them.
“This is a major departure from the traditional landlord-client relationship,” says van Eeden.
“We see Inospace not as a landlord or lessor but rather as a business enabler to our clients Each property has a full time on-site Centre Manager whose job it is to create and sustain an environment designed for growth.”
With prices of old industrial buildings relatively low, Inospace can afford to make substantial investment in remodeling its acquisitions and still be able to offer space at significantly lower rentals than in traditional business nodes.
“We have been attracting a lot of retail and office companies who are seeing the value of cheaper space in our mixed-use business centres. As the economy tightens users of industrial units are taking smaller spaces and rather using free-shared services that are built into fixed one-price rentals. This passes substantial savings to our clients” says Van Eeden.
Fibre and WiFi are embedded in all Inospace business centres. Shared facilities include a modern business hub with meeting rooms, fully equipped boardrooms, cafés, restaurants and pause areas. Each rented unit has its own electricity meter, enabling tenants to control their energy usage.
“Our business centres’ proximity to major roads and transportation networks is another key advantage,” says Van Eeden. “With retail coming under pressure, on-line shopping increasing and urbanisation pushing city limits, many companies need affordable centrally located space from which to combine their distribution, administrative, retail and office requirements”
With a growing list of businesses wanting to move into their newly refurbished centres Inospace seems to be capitalising on a growing international trend that has been identified by companies such as JSE listed Sirius Real Estate that owns 46 business centres in Germany.
The company’s latest Powder Mill offering on Sunset Circle, Ndabeni is currently undergoing extensive remodelling and is scheduled for occupancy in January 2018. According to Inospace the Powder Mill is filling up fast and they have already secured anchor tenants. Events and staging company Ampere Technology is relocating its head office to The Powder Mill where it will occupy 3 500 sq metres. The centre offers a combination of studios, offices, light production units and warehousing.
