Frequently Asked Questions about Airport Property

Want to know more about Airport Property? Read our Airport Property FAQs. We have outlined frequently asked questions about renting or buying commercial and Industrial Real Estate in Airport Industria which consists if Airport City, the Airport Precinct and King Air Industria

Why should I locate my business in Airport Industria?

Top 10 Reasons to locate your business to Airport Industria.

Airport Industria is:

1. located right next to Cape Town International Airport

2. located 15 Minutes from Cape Town CBD 

3. located 15 Minutes from Table Bay Harbour

4. located on the N2 National Highway 

5. located 7 minutes from the R300 Ring Road

6. the closest Industrial Area  to Cape Town that still has land available for  development

7. Close to all forms of public transport

8. Close to labour

9. a well run City Improvement District (Airport CID)

10. Cape Town’s best location for warehousing distribution and logistics

Is there land for development in Airport Industria?

Airport Industria is the closest area to Cape Town CBD that still has significant vacant land holdings for turnkey industrial property development.

The two major areas are King Air (previously the King David Golf Course) and the Airport Precint (ACSA land surrounding Cape Town International Airport).

What rentals can I expect to pay in Airport Industria?

Currently, the lowest rental per square metre in Airport Industria is approximately R55. This is for an older, low eaves building with limited yard space.

The highest rental is approximately R120 per m² for a dedicated courier building which has a large yard, i.e the building covers only around one third of the land

On average, rentals for modern industrial buildings with reasonable height, reasonable access and non asbestos roofing range between R70 – R 80 per m².

Warehouse Rentals are highest in Airport City and the Airport Precint, Warehouse rentals in Airport Industria tend to be lower.

As King Air will be developed to tenants’ requirements, rentals are driven by viability studies and are expected in line with new developments in other established industrial areas.

What is the difference between a Captitalization rate and Net Initial Yield?

Capitalization rate and Net initial yield are similar but not the same concept although they are frequently used interchangeably by brokers.

Capitalization rates imply that the property is let at market rentals into perpetuity and used to compare similar investment properties. Net yields are simply the first year’s income less expenses divided by the purchase price expressed as a percentage. This is the same basic formula usde in determining a Capitalization or “Cap” rate but the essential difference is the rental is the actual net rental and may be above and below the market rental.

More advanced methods of valuation use discounted cash flow and net present value comparisons.

What is the difference between Gross and Net rentals?

Gross Rental is the total rent payable by a tenant, whereas Net Rental is the tenant’s rental portion that excludes their contribution to property operating costs. These excluded costs could comprise of rates, insurance, property maintenance, security etc. If the Landlord is a registered VAT vendor (most commercial and industrial landlord’s are VAT vendors) then VAT will be added to the rental. Generally, Airport property quotes Gross rentals excluding VAT.

Other terms for net leases are a FRI (Fully repairing, maintaining and insuring lease) lease or Triple Net Lease. Both these terms imply that rates, insurance and property maintenance are excluded from the net rental and are for the tenant’s account.