A lot has been said about how Covid-19 has resulted in a new normal. Time will however tell how much of this narrative is driven by wishful thinking as opposed to reality. From a retail perspective, I think it is safe to say that the pandemic accelerated structural changes that were already starting to emerge. If we look at international trends, online shopping is increasingly becoming mainstream. Although still in its infancy in South Africa, the lockdown from about a year ago converted a significant number of shoppers to the convenience, safety and variety offered by online purchasing.
This will inadvertently impact on how goods and services are delivered to the end-user, necessitating a step-change in how we think about logistics and warehousing. As a result of the rise of online shopping and customers demanding increased turn-around times, the adage of location, location, location is now more important than ever. This holds especially true for logistics providers and FMCG companies, where location decisions can make the difference between profit and loss.
The need to have warehousing and distribution centres within the last mile proximity of high-density nodes is also changing the way cities are being planned and developed. With a national government emphasis on the development of smart cities, the OR Tambo aerotropolis zone in Ekurhuleni – a first on the continent – sets an example for nodal integration.
Leveraging the busiest airport in Africa, the aerotropolis will comprise a zone within a 30km radius of the airport in which economic hubs will be created for different industries, such as manufacturing and hi-tech industries, agribusiness and food processing, education and skills training, logistics and distribution, natural resources, and energy.
On completion, the node will incorporate several logistics and warehouse parks such as Pomona Precinct* in close proximity to the airport and just off the R21 freeway. These parks are being integrated with finance, trade logistics, commerce, technology, healthcare, green areas, and housing.
A key focus of the aerotropolis will be the use of inter-modal connectivity to generate economic development, especially for time-sensitive sunrise businesses including perishables, bio-life sciences, advanced manufacturing, aerospace, innovation, information, and communication technology, as well as research and development.
For prospective manufacturing, warehouse and logistics owners and tenants, this does require advanced planning and ingenuity around the cost of land and building. Considering a variety of locations that all meet the business’ requirements, including access to customers and resupply, highways, and proximity to ports, the cost of land and building of one location compared to another can become an important differentiator.
The face of warehousing and logistics is also changing, with especially multinationals consolidating into single facilities combining multiple offices, logistics and warehousing operations under one roof to achieve economies of scale and operational efficiencies.
This means modern A-grade logistics and warehouse facilities need to accommodate the amenities required for corporate use as well as the characteristics to facilitate the unique demands for logistics and warehousing. Marrying these requirements whilst remaining conscious of the environmental footprint of these facilities in a design that is energy efficient and environmentally friendly is a mammoth task.
Urbanisation has resulted in logistics providers having to adapt to shorter distribution runs and increased demand for last mile deliveries in densely populated areas. Coupled with the acceleration effect of Covid-19 on online demand, the way we work, live and play is set to rapidly change.
*Pomona Precinct in Elgin Road, Pomona, is Improvon’s latest contribution of premium grade warehousing to rent in Pomona. It is the ideal location for logistics businesses, situated just off the R21 Freeway, accessing OR Tambo International and the rest of Gauteng, and units come standard with 9m floor-to-eave height and 12.5mm J2 roof top sprinklers. Other key features are large yards, 24 hour manned security as well as a fully electrified fence around the perimeter walls, easy for interlinked vehicles and ample common trucking and road accesses.
-By Mark Truscott, Head of Leasing and Marketing | Developments at Improvon