Owner and operator of last-mile logistics assets Inospace has acquired the Hellmann Building, in Isando, for R43-million, adding a fifth property to its existing Kempton Park footprint around the OR Tambo International Airport when much of investor sentiment remains focused on the coast.

The deal is a result of a deliberate rebalancing of Inospace’s portfolio, with the group disposing of select industrial assets, in Cape Town, and redeploying capital into Gauteng, where the value is “significantly more compelling”, says Inospace founder and CEO Rael Levitt.

“We are finding much greater value in Johannesburg assets. The Cape Town market is not a yield play now, and it feels a little too frothy. We believe [that] Johannesburg will turn the corner, hopefully after the municipal elections.”

The acquisition follows Inospace’s recent buys in Wadeville, Germiston, and in Wynberg, Sandton, and forms part of a near-term target to grow its small-format warehousing portfolio in Gauteng by R330-million, building towards a three-year target of R1-billion across the province.

The Hellmann Building offers a land size of 9 518 m2 and a gross lettable area of 8 322 m2. Its namesake occupant, Hellmann, will remain as a tenant for the immediate future.

For Inospace, the value lies in not only the building but also its being located within a high-performing logistics node. The site is situated next to one of the region’s main freight and commuter arteries and next to Electron Exchange, which Inospace has owned since 2021.

“We have real confidence in the OR Tambo node. The Hellmann Building sits right alongside one of our most successful parks. It lets us consolidate our footprint around the airport and back the growth we’re already seeing in the portfolio,” adds Levitt.

Inospace MD David Bernstein says the two buildings, Hellmann and Electron Exchange, mean more than a shared boundary – they also mean shared access, shared services and a single management footprint across the two sites, as “the eaves height and yard give us flexibility as we bring micro- warehousing into the mix”.

SME, E-Commerce Hub

Inospace plans to reposition part of the Hellmann Building to better serve its core small and medium-sized enterprise (SME) tenant base.

“The Hellmann Building is already a modern, well-built facility, an A-grade warehouse with AAA-grade executive offices and a 12-m eaves height, so this isn’t a case of redeveloping a distressed asset. Our focus is on integration and repositioning: aligning access, services and management with Electron Exchange next door, and converting the basement into a world-class e-commerce distribution hub tailored to small businesses.”

The basement conversion will be prioritised once integration work with Electron Exchange is complete. For tenants, the benefit is a high-visibility, highly accessible location, coupled with the efficiencies of a consolidated operation.

“Shared access, shared services and shared infrastructure reduce overheads, and we can pass those efficiencies on to tenants,” says Levitt.

The move is also aligned to Inospace’s sustainability and digitalisation focus. With more than 50 parks and over 2 100 SME tenants nationally, the group argues that repurposing existing infrastructure and enabling digital growth are more sustainable than greenfield development.

Levitt notes that converting the building into an e-commerce distribution hub also provides SME tenants with the physical infrastructure they need to compete in an increasingly online retail environment.

Unlocking Value in Johannesburg

Inospace’s Gauteng portfolio has recorded double-digit rental growth, indicating a reversal in the “semigration” trend, with affordability driving households and businesses back inland.

Property prices and rentals in Johannesburg remain lower than those in Cape Town, enabling businesses to secure larger or better- located sites for the same budget – a dynamic that Inospace believes will accelerate after the municipal elections.

“This deal is part of a broader nodal strategy for Inospace. Rather than acquiring assets opportunistically, we’re deliberately building density around nodes with long- term strategic value, and OR Tambo is one of the clearest examples of that thinking,” says Levitt.

“Consolidating our footprint around the airport reflects our confidence that Johannesburg’s industrial market still has material value to unlock,” he concludes.