Poised for growth in logistics sector
Urban Growth, a leader in large-scale supply chain logistics industrial properties, welcomes the recent interest rate cut by the South African Reserve Bank as a catalyst for sustained growth and development in the logistics sector. The 25-basis-point cut, announced on 19 September 2024, aligns with global economic trends following the Federal Reserve’s significant 50-basis-point reduction earlier this month. While the local cut was modest, it signals a potential turning point in South Africa’s economic trajectory with market speculation pointing to a further 50-basis-point cut in November should inflation continue to decline.
With consumer spending expected to rise as a result of the rate cuts, Urban Growth is positioned to harness these economic tailwinds. “The lowered borrowing costs provide an opportunity for businesses across South Africa to expand their logistics operations, especially in key regions like the Western Cape,” says Ross Gregory, Director at Urban Growth. “We anticipate a notable uptick in demand for industrial properties as businesses look to scale up their operations and capitalise on increased product flow.”
Urban Growth’s strategic investment fund, Bastion Real Estate Partnership, is set to benefit investors eager to seize opportunities in a shifting economic landscape. Gregory explains, “With the potential for further rate cuts on the horizon we are uniquely positioned to offer individuals the chance to own premium logistics properties while also contributing to the region’s healthy economy.”
Urban Growth remains committed to sustainable development, with ongoing investments in renewable energy, including solar power, across its logistics properties. As demand for logistics spaces grows the company continues to prioritise energy efficiency and environmentally conscious practices, making its properties highly attractive to tenants aiming to lower their operational costs and carbon footprint.
“Urban Growth is not merely reacting to these economic changes,we are strategically adapting. Our commitment to sustainable development remains steadfast, with ongoing investments in solar projects making our properties an off-grid option and even more attractive to tenants. With the Western Cape’s urbanisation trend continuing, we are set to capitalise on new acquisition opportunities and improve portfolio valuations,” said Colin Young, CEO of Urban Growth
“The convergence of economic growth, urbanisation trends, and sustainability initiatives creates a perfect storm of opportunity for Urban Growth and Bastion,” adds Gregory. “As more companies invest in expanding their supply chains and logistics capabilities, we are prepared to meet that demand with state-of-the-art, eco-friendly properties.”
The interest rate cuts will also improve Urban Growth’s ability to secure financing for future acquisitions, further expanding its portfolio in high-demand urban areas. Young notes, “We’re not just reacting to market changes. We are proactively positioning ourselves to take advantage of emerging trends and solidifying our position as key players in the logistics sector.”
For investors, the opportunity to enter the market through Bastion has never been more timely. Young concludes, “With a solid track record, lower interest costs, and continued investment in top-tier logistics properties, we expect significant capital growth and portfolio value improvement in the coming years.”
Urban Growth remains committed to supporting South Africa’s economic recovery by providing essential logistics infrastructure that drives business expansion and regional growth.
For media inquiries or more information about Urban Growth and Bastion, please mail info@urbangrowth.co.za or visit the website.