Laila explains that the property industry is benefiting from retailers looking to strengthen their supply chains.
If there’s one positive thing that has emerged from the various crises the world has faced in recent years, including the Covid-19 pandemic and the conflict between Russia and Ukraine, it’s that supply chains are being bolstered more than ever.
“The turmoil and uncertainty we have faced over the last few years has really supported the trend and demand for logistics assets,” says Equites Property Fund CFO Laila Razack.
According to Laila, this is because of supply chain disruptions being experienced globally, including the uptake in e-commerce businesses. In South Africa, a lot of retailers are looking to fortify and fortify their supply chains by optimising their distribution centres and warehouses.
“These disruptions have caused retailers to reconsider their entire supply chain and think about how they can make it more resilient,” Laila explains. “In doing that, there’s a lot of consolidation. Some of them may have had four smaller distribution centres around various areas of the city and now they’re looking at making one big centre where they can benefit from economies of scale.”
She adds that consumers’ move to digital has also led to supply chains having to keep up with online sales.
Recent transactions with TFG have seen Equites embark on a project to build the retailer a new distribution centre in Gauteng, as well as expanding one of the existing distribution centres in the property fund’s portfolio. “We’re also seeing a lot of that demand coming from other retailers who are just looking to fortify their supply chains,” Laila says.
