Growthpoint's ethics and values defined our behaviour and we witnessed an astoundingly high level of compliance and exemplary conduct as South Africans countrywide identified the need to care for one another.

  Acquisition of Gosforth Park property After two years, we are able to conclude the R140m acquisition of a prime, newly completed facility in Germiston, Gauteng, with seven large units that were already fully tenanted on transfer.  
  Achieving the first Green Star rating for an industrial building in Gauteng In April 2020, Growthpoint and Serra Services achieved a 5-Star Existing Building Performance rating from the GBCSA for a 7 400m2 facility in Meadowbrook, Germiston. This small but prominent corner of Meadowbrook has become a shining example of a green building in South Africa, with Serra's premises being directly adjacent to Growthpoint's award-winning 5-Star Office Design v1-certified Grundfos development.  
  A steady rise in vacancies and arrears Weakened property fundamentals indicative of the steady decline in the economy and operating environment over recent years have been intensified in FY20 due to Covid-19.  
  An intensely difficult year for all sectors of the
Industrial businesses were strained before the Covid-19 crisis and this situation was exacerbated by the hard lockdown implemented to curb the pandemic and the sovereign credit rating downgrade to below investment grade.  


We performed below our expectations in FY20, with increased vacancy levels and provision for bad debts being substantial contributing factors. We have a diverse industrial portfolio and, on the upside, we benefited from the demand for big-box logistics and warehouses, which seemed to fare better in the market. However, we also have high exposure to smaller tenancies, which are more susceptible to changes in the economy.

We focused on five strategic areas during the year:

High-performance management

We sharpened the service we provided to clients with improved collaboration across our different teams and regions, and made measurable progress on the plan to align all our operations to deliver consistent service excellence nationally.

Growing our industrial portfolio by means of both acquisitions and new developments

This remains a long-term goal and was advanced as far as economic and market drivers would allow this year.

Rebalancing the portfolio

We maintained our focus on refining our existing portfolio to ensure that all our assets are aligned with our core property investment criteria.

Disposing of non-core assets

We successfully disposed of several assets that no longer meet our investment criteria, in commercially viable transactions.


We maintained our performance in this area but there is room for improvement. This year provided an opportunity to reassess how we express Growthpoint's environmental commitment in the industrial property portfolio. We are now planning the implementation of certain measures, including a renewable solar energy drive that is a core focus and will play a key role in our portfolio and our business going forward.

We achieved reasonable renewal success rates around the 70% mark and kept our average lease period consistent at around four years. Our renewal rental growth rate, however, was driven downwards by weak market conditions, an oversupply of stock and aggressive competition. While tenant retention is our primary goal, we are fine-tuning this strategy to focus on accommodating good and resilient tenant businesses. No-one benefits from a failing business and being buried under prolonged, unserviceable debt.

Portfolio highlights

In line with our rationalising and rebalancing strategy, we disposed of and transferred six properties in this financial year and the sale of a further three were agreed on and are in progress. We will continue this programme of disposal of non-core assets which no longer meet our investment criteria. Industrial property has rapidly become the favoured commercial property sector as we consider commercially sound transactions, but there are always buyers in the market who hope to pick up discounted assets.


Development of new logistics and warehouse-type assets is significant for our portfolio. A lack of appetite to grow our portfolio by overpaying for acquisitions – and a lack of assets on the market that match our portfolio standards – means that the only way to expand it in accordance with our set criteria is through development. By developing, we can control the roll-out, location and quality of our assets, and we do have access to the superior skills and experience of a great in-house development team. We specifically want to grow our portfolio in the Cape Town and Durban metros, where we believe we are currently under-represented in the industrial sector.

The final phase of our 38 000m2 Mill Road Industrial Park in Cape Town was completed at the end of the 2019 calendar year. We also completed our 20 000m2 Trade Park industrial park development on KwaZulu-Natal's main logistics and transport corridor linking Pinetown to the newly established industrial node of Mount Edgecombe. Both of these developments boosted exposure in these targeted areas.

Building Location Tenancy m2 actual
floor area
affected –
not centre's
Millroad Industrial Park – Phase 2 Belville, Cape Town Multiple 13 066   98   November 2019
Sterling Industrial Park – Units 3-8 Samrand, Johannesburg Multiple 19 479   136   November 2019
Mt Edgecombe Industrial Park – Phase 1 Mt Edgecombe, Durban Multiple 20 301   127   October 2019
Growthpoint Industrial Estate – Building 3 Meadowdale, Johannesburg N/A 4 362   31   July 2019
Millroad Industrial Park – Phase 3 Belville, Cape Town Laser Logistics 4 884   44   July 2019
In progress
Wadestone Industrial Park Wadeville, Johannesburg Naturecell 5 383   28   July 2020
Highway Meadowdale, Johannesburg Rebel Safety Gear 1 235   8   November 2020
Centralpoint Infrastructure Samrand, Johannesburg N/A   15   February 2021
Total         487    

Due to the weak economy and Covid-19, leasing take-up in these developments was, however, slower than we expected when the projects were begun. They were around 60% let at year end, but we are confident that, when more stability returns to the market, these great products in good areas will be fully occupied.

We also extended the lifecycle and enhanced the relevance of several assets through refurbishments and extensions. Our planned redevelopment of the former Midas facility in Germiston was, however, delayed by the Covid-19 shutdown.

At this stage, we have no new industrial developments planned for completion in FY21. Should opportunities arise, only tenant-driven projects would be considered, and on a case-by-case basis. We will not consider adding any risk to our business given the current property market conditions.

Covid-19 impact

Never before have all but a handful of businesses in the country locked down for 40 days or longer. For the manufacturing industry, restarting is also not as simple as flicking a switch; there is a lag in receiving materials, in receiving and placing orders and in businesses having to re-organise to operate with only 30% of their workforce. This impacted manufacturing and production capacities even after the hard lockdown. In addition, South Africa's consumption-based economy relies heavily on imports and exports that were negatively affected by many international markets being closed and then reopened, sometimes only temporarily, at different times.

The impact of Covid-19 on industrial property and our business was significant. We offered rental deferments rather than rental concessions to clients who requested relief, with repayment of the deferments commencing from 1 June 2020. This was optimistic in some cases considering the extended lockdown and we came to realise that there were several tenant businesses that would have to be nursed through the lockdown at Growthpoint's expense if they were to survive. The financial implications of this for our business were massive but we took the view that it was paramount to protect the sustainability of our tenants and to retain them as clients. Even so, some companies will have no choice but to close their doors, which will increase our already relatively high vacancy factor.

Our staff have been incredible during this time. They have been able to maintain good contact with each other and our clients, using the technology and systems at our disposal, and supported by the Growthpoint IT team. As a client-centric business, we have never been closer to our tenants.

As part of our community outreach, and as a participant in the national response to Covid-19, we offered industrial facilities to the government for use as field hospitals and PPE warehouses.

We learnt that a pandemic renders meaningless all standard scenario planning and forecasting. Growthpoint's ethics and values defined our behaviour and we witnessed an astoundingly high level of compliance and exemplary conduct as South Africans countrywide prioritised the need to care for one another.

In this spirit, we endeavoured to be easily approachable, quick to respond and equal to the challenge of dealing with all the additional administration required to communicate with our clients and to investigate and review requests for rental relief. Our team did exceptionally well and the vast majority of our clients were hugely grateful for our approach and partnership. Unfortunately, we were unable to accommodate some requests that were simply unaffordable but fortunately, there were very few businesses that sought to exploit the situation.

Outlook for FY21

We are expecting yet another difficult year in a series of challenging years where each one has been incrementally tougher than the previous year. In fact, FY21 is likely to bring a confluence of headwinds far worse than anything we've seen before due to South Africa having been downgraded to sub-investment grade by the rating agencies. We expect more business failures, higher unemployment and the consequent absence of business and consumer confidence in the face of insufficient government funding to assist the economy to recover from the Covid-19 crisis. Despite these conditions, we are committed to keeping good clients. This task is not going to be easy but there is no doubt that we have the right assets, teams, experience and relationships to succeed.

Industrial tenants top 10 by gross rental contribution as at 30 June 2020

  Tenants   GLA m2
1 The Bidvest Group Limited   58 681
2 Adcock Ingram Holdings Limited   34 549
3 Consolidated Steel Industries (Pty) Ltd   60 267
4 Scania SA (Pty) Ltd   23 717
5 Distell Limited   45 636
6 GZ Industries (Pty) Ltd   21 543
7 Heneways Freight Services (Pty) Ltd   25 573
8 Anchor Logistics   25 070
9 Nestlé South Africa (Pty) Ltd   16 255
10 KAP Industrial Holdings Limited   22 297
  333 588
Balance of the sector   1 812 488
Total for the industrial sector (excluding vacancies)
  2 146 076

Geographical diversification by GLA (%)


Geographical split by value (%)


Segmental split by GLA (%)


Segmental split by value (%)



Industrial properties top five by value

Hover on properties below to view infomation


Growthpoint Business Park is a mixed-use facility in central Midrand with highway exposure to the N1. Set in a tranquil estate with a number of national and international clients. There is some bulk available for future development.

Midrand 598.4 4.5% 68 627m2 3.0%

Growthpoint has 25% joint ownership of this newly developed A-grade industrial park in the sought-after Montague node. It is home to 18 businesses, which include leading brands such as, Supergroup, ABB SA and The Radiant Group. There is high demand for further development of the park's available bulk.

Cape Town 395.3 3.0% 41 048m2 1.8%

With superb highway frontage and access, Hilltop Industrial Park encompasses some of the most functional industrial premises in South Africa. This B-grade industrial park is currently undergoing a major upgrade. It comprises 19 businesses and its tenants include Scania, Cartoon Candy, Capital Africa Steel, MAN Diesel and Turbo SA.

Germiston 368.8 2.8% 76 284m2 3.3%

A single pharmaceutical temperature controlled warehouse with office facilities and within easy access to the N1.

Midrand 270.3 2.0% 22 455m2 1.0%

This single tenanted large industrial facility is situated in the prominent industrial node of Isando

Kemton Park 225.7 1.7% 50 219m2