#BizTrends2025: Top trends shaping industrial leasing in 2025

Source: Supplied. Justin Thom, director of Galetti Corporate Real Estate.

However, not known by some, this asset class has in fact been steadily making its way up the ladder for decades, largely driven by demand from the country’s manufacturing and logistics sectors.

Both these sectors have experienced their fair share of highs and lows, but a boost in economic performance, coupled with increased investment in the second half of the year, may bode well for a stellar performance 2025.

The growth of the industrial property sector hinges on the growth of some of the country’s key sectors and all-importantly, the growth of ecommerce.

The latest Rodes Report (Q3:24) highlighted continued growth in the sector with vacancies of just 3.6%, well below the long-term average of 4.2%. It also highlighted rental growth of 6.9% year-on-year for industrial units, 500m² units for example, with larger spaces (1,000m²) experiencing an even higher increase of 7.4%.

Compared to other asset classes like retail, industrial properties are relatively inexpensive to maintain and run. They’re viewed as a stable asset class that offers higher returns, and in terms of location, they’re often centrally located near to major transport routes and networks.

Regional leasing trends in 2025

Gauteng’s industrial property sector will see improved demand in 2025. With everyone formally returning to work, we are seeing an increase in enquiries for industrial premises.

This market also offers more value for money with Johannesburg’s industrial property rentals typically ranging from R65 to R95 per m².”

And while there is very little industrial space on offer in the Western Cape, there will be high demand in 2025.

The Western Cape continues to attract businesses seeking well-maintained infrastructure and access to global markets via the Port of Cape Town. Demand for industrial property in regions like Bellville, Montague Gardens and Epping is likely to remain strong, particularly from sectors focused on exports, however finding space remains a key challenge for many businesses looking to set up shop.

KwaZulu-Natal, despite its infrastructure challenges, may be of interest with many of the country’s large manufacturers still prominent in the region. Durban’s role as a major port city positions it as a key area for industrial leasing. Many suppliers to the big manufacturers also want to be close by to ensure swift service and delivery.

General trends shaping the industrial leasing landscape

But 2025 won't be without its challenges, also presenting hurdles in 2025 such as infrastructure challenges, municipal service delivery, unions and potential strikes, as well as barriers linked to security, safety and regional disparity.

For landlords and developers, success in 2025 will depend on understanding (and delivering on) tenants' needs. Tenants, on the other hand, will need to weigh up costs, location and infrastructure capabilities carefully to secure spaces that align with their strategic goals.