Transactions within the Cape Town industrial property sector are certainly demonstrating that the market is bouncing back, according to property specialist and Spear REIT’s head of leasing, James Bylos. Bravo Brands, the South African home comfort group, has entered a 10-year lease with Spear REIT at Blackheath Park, in Cape Town. Spear REIT will be redeveloping approximately 50% of the 38 000m2 industrial premises. These conversions will enable Bravo Brands to bolster the production and distribution capacity of its lounge brands for both local and international markets.
Bravo Brands, synonymous with branded products such as Alpine, Gommagomma, Grafton Everest, King Koil, La-Z-Boy, Sealy, Slumberland, Edblo and Nouwens, has chosen Cape Town as the growth node for its export business, citing the Western Cape as the location with the best growth prospects. According to Group Chief Executive Officer, Dave Govender, the agreement is aligned to its core purpose of strengthening its local economic contribution to enable its brands, stakeholders and communities to prosper – through local procurement and production, and by spearheading industry transformation through skills development and transfer.
As more local companies move their operations onshore and place less reliance on China, it seems that the deglobalisation trend is gaining momentum as a sustainable supply-chain solution. Speaking at Blackheath Park, Quintin Rossi, CEO of Western Cape-focused Spear REIT, says that the property market will be required to adapt to the demands of deglobalisation by providing internationally matching facilities.
Having outgrown its current premises in Parow Industria which is also owned by Spear, Bravo Brands sought an internal solution, given the strong alignment between the two groups. Demonstrating the advantages of a diversified property portfolio and the agility to adapt, Spear responded with a R74 million re-development plan of its Blackheath property. Bravo Brands’ initial take-up at Blackheath Park will be 16,000m2 with intended expansion over the next five to seven years. Spear’s project team will execute the redevelopment, to provide a turnkey facility for Bravo Brands. This includes a solar installation that is earmarked for 2023 in line with Spear’s and Bravo Brands’ sustainability commitment.
Commenting on the agreement, Cliff Toerien, Chief Operations Officer for Spear said, “The multi-year redevelopment lease concluded with Bravo Brands is an endorsement of the ability of Spear’s portfolio to offer highly versatile solutions to a wide variety of blue-chip users in the market.”
Blackheath’s proximity to Cape Town International Airport, access to public transport and attractive commercial terms, supported by arterial upgrades and broader development activity undertaken over the last five years are fast positioning it as a sought-after industrial hub.
Rossi says that although the upgrades are underpinned by Bravo Brands’ specified needs, the redevelopment improves the operating metric of the property through the capital enhancement. He went on to say that this also includes an improved tenant covenant and a boost to the weighted average lease expiry (WALE) on the property. The redevelopment further exhibits the desirable locations of Spear’s portfolio assets and its versatility for redevelopment and foresight of its management team.