According to the Rode State of the Property Market Report (Q1 2025), industrial property continues to outperform office and retail sectors, showing solid rental growth and impressively low vacancy rates. For savvy investors, this performance reaffirms what many already know — the industrial market remains one of South Africa’s most promising asset classes. Within this space, warehouses and distribution centres stand out as two key opportunities, each offering unique advantages depending on your investment goals.
While the terms are often used interchangeably, they serve very different purposes. A warehouse focuses on long-term storage, keeping goods safe until needed, while a distribution centre focuses on movement, speed, and efficient delivery to retailers or consumers.
Warehouse investment potential
Warehouses have become a reliable favourite among industrial investors thanks to their stability and consistent returns. As e-commerce continues to grow in South Africa, the demand for large, well-located storage facilities has surged, driving rental growth and reducing vacancy risks. Unlike distribution centres, which depend heavily on fast-moving logistics and infrastructure, warehouses benefit from long-term tenants and predictable occupancy.
Their versatility also adds to their appeal. Warehouses can accommodate everything from office and storage space to light manufacturing, making them adaptable to different tenant needs. This flexibility, paired with their lower maintenance costs and steady income potential, positions warehouses as a low-risk, high-value industrial investment.
Warehouse investment activity in Gauteng
The past year has seen major players expanding and upgrading their warehouse operations, showing confidence in the province’s industrial property market.
- Suzuki Auto South Africa: Relocating to a new 24,507 m² custom facility at Linbro Business Park to support its expanding operations.
- Rhenus Group: Invested R440 million in a 28,000 m² logistics facility in Meadowview, Johannesburg.
- A Square Forklift: Moved into a new 9,000 m² warehouse on an 18,000 m² site in the S&J Industrial Estate, Germiston.
Distribution centre investment potential
Distribution centres are also becoming prime investment assets as the rise of e-commerce fuels consumer demand for speed and convenience. With shoppers expecting same-day or next-day delivery, retailers and logistics providers are competing for strategically located distribution hubs, keeping vacancies low and rental growth strong. Developers are also building new facilities with tenants in mind, ensuring steady demand and faster occupancy.
Unlike warehouses, which focus on long-term storage, distribution centres are dynamic, high-throughput spaces that keep goods moving. Their role in modern supply chains translates into higher rental premiums and stronger long-term growth prospects, making them a lucrative choice for forward-thinking industrial investors.
Distribution centre investment activity in Gauteng
The province continues to attract large-scale logistics investments, with top brands recently expanding their distribution capabilities to meet the rising demand for retail.
- Innomotics: Opened a new Midrand assembly and distribution hub for electric motors and drive systems.
- Shoprite Group: Unveiled its 94,000 m² Riverfields Distribution Centre in Kempton Park to serve over 500 Gauteng supermarkets.
- Mahindra: Established a new Midrand parts distribution and training facility, doubling its storage capacity.
Tips for making an investment decision
When deciding between investing in a warehouse or a distribution centre, start by looking at location, demand, and functionality. Warehouses tend to perform best in affordable industrial zones where long-term tenants need storage stability. Their simpler infrastructure means lower maintenance costs, minimal tech upgrades, and steady, predictable rental income. This is ideal for investors seeking reliability and low risk.
Distribution centres, on the other hand, demand prime locations near highways, airports, or ports to support rapid logistics. They’re tech-heavy, with automation, robotics, and real-time inventory systems driving operations. While setup costs are higher, these facilities attract strong tenant demand and premium rental rates, offering higher growth potential for investors ready to play in the fast lane.
Find your ideal industrial property fit
At Newpoint Property Group, we have a passion for connecting people with property. Whether you’re drawn to the steady reliability of a warehouse or the fast-paced energy of a distribution centre, our team can help you find the right space to meet your investment goals. Explore our latest listings or chat to one of our industrial property specialists today.
