DEVELOPMENT

We have facilitated the development of many large factory and warehouse constructions which have ultimately proven to be absolute winners with the respective Tenants as the savings have shown over the long term. We have all the available development sites in Cape Town listed on our data base and are therefore in a position to offer you a complete list of options.

Reasons to Develop to own specific requirements:

Location – Probably the most obvious and possibly the most important reason is that one can in most cases choose the position or area that they wish to be located in. Location is important for two reasons – it affects the staff who need to travel each day and it has huge cost effects on logistics and distribution over say a ten year period.

Design – The operational practicality of the facility and whether the space is appropriately designed for the required performance is in some instances more important than location. Factors which need consideration are natural lighting, the building’s orientation towards the sun and prevailing wind and overall specific business needs like height, loading, power supply and private yard area.

Cost Reduction – The big “O” is overheads and every company is looking at how to reduce its overheads. By enabling effective design criteria numerous savings can be achieved in the following ways –

  • Location can substantially reduce company transport costs over a ten year period
  • Effective design can reduce heating and cooling costs, allow for better flow of the product through the factory or warehouse, enable use of greater stacking height, provide for better fire safety, provide adequate yard space for turning of the ever increasing size of vehicles and office layouts can be tailored to be more efficient. Also in the new digital age, high speed infrastructure can be provided for.
  • Relocation cost can be done away with. The costs of moving every few years is difficult to determine but will impact on the bottom line. In addition, should a company find themselves in two or three properties due to growth over time, the savings to be made by placing everything under one roof are huge and also provides for greater control and security.

The Procedure:

The normal procedure that will be followed is briefly summarised as follows –

  • Quantifying the companies requirements with regard to area required under roof and yard area to determine the size of the site needed.
  • List and view all suitable sites noting their pro’s and con’s with specific reference to your business.
  • Decide on say the best two options.
  • Submit a detailed list of specifications to the owners of the sites to enable them to compile a basic drawing for initial comment.
  • Make changes to the drawing until the design meets with approval.
  • Owner will do costings and report back with a construction and total development cost which will be amortised over the lease period to arrive at a monthly rental.
  • Submit to Tenant’s board for initial approval.
  • Owner to draw up the Lease Agreement with Tenant building specifications for approval and signature by Tenant.
  • Building plans are drawn and submitted to authorities for approval.
  • Tender quotations are called for and in consultation with you, preferred builders appointed.
  • Construction commences.
  • Occupation on completion.

The time period for the above procedure to be completed depends on many factors and differs from development to development. As a rule though, a period of 8 to 12 months should be allowed for.

Factors affecting Rental:

 

Cost of the vacant land ie. High profile position compared to standard industrial road.

Size of paved yard area or land held for future expansion.

Raising the warehouse for dock leveller loading.

Height of warehouse eaves and requirement for in rack sprinkler systems.

Size and quality of office component and finishes.

Air conditioning systems.

Length of Lease, as the development cost is amortised over the initial lease period,· therefore longer lease = lower monthly rental.

Type of Lease – Gross or Triple Net  A triple net lease puts the onus on the Tenant to insure and maintain the property.

This can vary the monthly rental as it is difficult to predict exactly what the maintenance on the property is going to cost; while a gross lease leaves these responsibilities to the Landlord.

With a gross lease, the Tenant is better able to predict the monthly and annual operating costs, as they are worked into the lease.

In some cases these operating costs are listed separately and escalated differently from the basic rental.

One should always be looking at how to cut costs, be it consolidation, outsourcing, developing or all of the above.

We have idea’s, why not talk to us.

We will come and see you to discuss the options – with no obligation.

All discussions will be as confidential as you may require – Call Eugene 021 551 5511 or E-Mail