Cape Town and Durban Lead Africa in Logistics Investment Amid Rising Demand and Low Vacancies
Cape Town and Durban have been identified as two of Africa’s most attractive logistics and industrial property markets, thanks to their resilience, adaptability, and growing investor appeal.
This is according to a recent report by Cushman & Wakefield | BROLL, which highlights how both cities are leveraging global trends while managing local challenges.
The report notes that urbanisation, e-commerce expansion, and global supply chain shifts are driving demand, even as land scarcity and climate risks persist.
Cape Town’s industrial sector is thriving. Rents are climbing, and vacancies are dropping, propelled by the city’s operational reliability, limited industrial land, and the ongoing trend of ‘semigration’—people and businesses relocating from other provinces.
“Demand is being fuelled by a flight to quality, rising e-commerce, and semigration,” said Shane Howe, Head of Western Cape Industrial Broking at Cushman & Wakefield | BROLL.
Cape Town stands out for its sound governance and dependable infrastructure, positioning it as a lower-risk investment destination compared to Gauteng.
Modern industrial parks in areas like Brackengate and Richmond Park are expanding rapidly, while older nodes such as Epping and Parow are being revitalised through gentrification.
Howe advises investors and tenants to align their location and asset strategies with long-term business objectives:
“Limited stock and rising demand, particularly for modern facilities, mean strategic asset selection is critical for sustainability.”
Durban, while facing more structural challenges, remains a strong logistics hub due to its proximity to the port and stable demand for space.
Chronic land shortages—exacerbated by a lack of flat, flood-free development sites—have turned the market into one that favors landlords.
“There hasn’t been a meaningful release of viable land in more than 10 years,” said Anthon van Weers, a property practitioner with Cushman & Wakefield | BROLL.
“Much of the usable land is held by Tongaat Hulett, with development constrained by terrain and financial limitations.”
This scarcity has pushed vacancy rates to record lows, particularly for mini-units and large distribution centres (DCs), which are quickly absorbed upon release.
A-grade DC rental rates currently range from R105/m² to R110/m² and are expected to rise further. However, Durban’s high municipal rates—roughly double those in Cape Town or Johannesburg—are causing some tenants to hesitate.
Despite these challenges, Durban offers compelling investment potential. “Stable demand, port access, and long-term leases from logistics operators make Durban a low-risk market,” Van Weers added.
As e-commerce continues to transform retail, demand for small-format warehouses (100m²–500m²) is growing.
Retailers are increasingly moving from brick-and-mortar stores to fulfilment-based distribution models.
Nodes like Cato Ridge, Shongweni, and Tongaat are facing high logistics costs, but interest in compact warehouse units remains strong.
Globally, logistics property investment has surged by 43% over the last decade, driven largely by a 289% increase in e-commerce and demand from third-party logistics providers.
South Africa reflects this trend, especially in high-demand, low-supply areas like Cape Town and Durban.
Cushman & Wakefield’s Climate Risk report underscores the importance of climate resilience, noting stronger lease performance in lower-risk zones.
Multinational tenants are particularly focused on energy independence, water security, and climate resilience—making Cape Town’s Western Corridor and select Durban nodes especially attractive for long-term investment.
Cape Town and Durban are proving that with the right mix of infrastructure, governance, and strategic development, South African cities can compete globally as top-tier logistics and industrial markets.
