In a year that’s seen little to celebrate in the property market, the industrial sector has remained remarkably resilient throughout.
In a year that’s seen little to celebrate in the property market, the industrial sector has remained remarkably resilient throughout. This has, in part, been due to the rise of e-commerce, with consumer online shopping accelerating the need for delivery logistics, and space to manufacture and store a wider variety of products.
One fascinating insight into the continued success of the sector lies with a top player in the industrial property sector, Inospace, which turned the traditional landlord role on its head by adopting an approach more common in the hospitality sector. By offering pay-as-you-go leasing with flexible halfway or 30-day exit clauses, multi-space usage and top-drawer added-value and service overlays to businesses hard hit by the economic down turn, they’ve managed to retain an impressive customer retention rate of nearly 90% and fill new parks.
“We don’t see ourselves as a traditional landlord just wanting to fill space, and we don’t have tenants. We have clients,” says Jodi Sher, Marketing Director of Inospace. Their space-as-a-service approach - which comes with an impressive array of benefits and support - has disrupted the industrial property sector since their entry in2017.
Their inspiration was sparked by founder, Rael Levitt. “While studying at UCLA, Rael was introduced to new property models by top retail and office operators who were grappling with all the changes coming to market. This sparked an International fact-finding trip and the realisation that there was a big gap in the industrial property market in South Africa,” says Sher.
“At the time, business parks were mostly just office parks. Now, when we take over old buildings and refurbish them, we turn them into branded mixed-use business parks with a range of industrial, logistics, storage and work spaces in one location and with a suite of service overlays, which is quite unique here.”
The space-as-a-service trend is a global paradigm shift in the way in which the commercial real-estate industry provides products and services to clients.“In many respects, you can compare what we’re doing with the hotel industry,”she says. “They rent rooms per night, and we rent longer term, but the idea is that someone is coming into your property and is going to spend time there, so every touch point along the way needs to be a good experience. Hotels don’t only give you a room they give you all the value-added services. From the way you engage online to the way you’re greeted at reception to when you enter your room and look around and see the sheets are clean and it looks beautiful, is exactly the way we approach our parks.
“We’ve created a suite of added-value business benefits overlaid into the space our clients rent. Our business hubs are the heart of our parks with a manned reception where you’re given a warm welcome, and great common areas to which all clients have full access, including fully-equipped meeting rooms, on-site cafés, pause areas and kitchens. We are constantly looking for new value added services and recently added PUDO Courier Lockers as well as forklift equipment hire to our suite of services. We also offer satellite use of the hubs, whereby clients travelling between Johannesburg and Cape Town can use the boardrooms at any of our business parks for meetings.”
Branded business parks aren’t familiar to South Africans, who are more used to dealing with a managing agent when renting space, says Sher. “We’ve spent a lot of time and effort building a meaningful brand, and not just grey and red buildings. Our park management teams are always on-site, building relationships and engaging with people. Those partnerships allow us to really support clients, whether they need more space because their business has changed, or they’re going through a tough time and need us to help accommodate them. We are also passionate about remaining on the cutting edge of clients, attracting new types of clients who are looking for industrial space, such as dark kitchens, indoor farming, dark stores and e-commerce businesses for last mile delivery and logistics.
“We’ve seen such lovely client success stories emerge from our parks, like Cape Bio Pharms that started out renting only a small space but now occupy close to 50% of one of our parks.This other-daughter team are revolutionising plant-based protein, expanding their business this year to include COVID-19 antibody testing kits.
“There’s also Veldskoen who have tripled in size within one of our parks on their incredible journey of success and Gigi Banting Baker, who moved from a market into Island Workshops in Paarden Eiland, and, during COVID-19, actually expanded her business. Now she even hosts Saturday markets in the business park. Their success is our success.The role we play in helping clients grow is what makes it all worthwhile.”