by Magdaleen Duvenage

Property investors guide

Commercial and industrial property investors beware

Jorge Da Costa; CEO of Improvon
Jorge Da Costa.jpg

Property investment is a complicated business. A sound property strategy is vital when deciding on a suitable location for new business operations and making the decision to invest in industrial or warehousing space. There are various factors of which potential investors should be aware if they are to be successful in their endeavours.


Jorge da Costa, chief executive of Improvon, highlights zone availability as an important consideration for property investors. “While there is still a fair amount of available land in Johannesburg, much of it is constrained by power supply issues,” he explains. Investors may have their eye on a spacious piece of land, in what seems to be a convenient location, but if the area has a poor power supply infrastructure, it is simply not a viable option.


Added to this are the challenges presented by town planning requirements. These include rezoning and environmental impact assessments. “Environmental impact assessments can create complications simply because they are so time consuming,” Da Costa explains.


Aside from issues around land, property investors are battling the ongoing challenge of skills shortages. “Whether it’s town planners or engineers, there is a certain level of expertise that is in short supply throughout the industry,” says Da Costa.


Traffic congestion is a concern for any business owner looking to invest in a new location, but it is a particular challenge for distribution companies, as they are constantly dealing with tight delivery schedules. “Distributors can avoid the pitfall of traffic congestion by setting up their warehouses on the edge of the city where there is little traffic to contend with,” De Costa advises. “South Africa has relatively open urban designs and this enables businesses to opt for strategic locations that will provide them with the necessary access points.”


Solutions to traffic congestion can be incorporated into business strategy. “Distribution companies in Paris, for example, have started to cut down on their usage of trucks in the delivery of products in order to alleviate traffic congestion,” Da Costa reveals. “While they still utilise heavy-duty vehicles to transport their products to the depot, the final leg of the journey – from depot to client – is made using motorbikes. The denser a city becomes, the more companies need to find ways of adapting.” 


Another way of achieving this, he advises, is by relying less on road transport and more on rail. 


With sound strategies in place, company owners can adapt their business operations to ensure their property investment delivers positive returns.   


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Issue 74


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