VALUATION OF…
Distribution Centres
Large-format logistics and distribution facilities, valued on eaves height, yard ratio, and proximity to transport infrastructure.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Distribution centres are valued primarily on an income basis using the Income Capitalisation Method where let on a single, long-term lease to a logistics operator or retailer, given the typically strong covenant and extended lease terms in this sub-sector.
Applying the Big Five framework, the Income Generating Units are the main warehouse GLA, cross-dock or yard area and any office component, each analysed with regard to eaves height, floor loading, dock-door ratio and power supply. Contract rental is compared to market rental for comparable distribution facilities in the same logistics corridor, and the capitalisation rate reflects tenant covenant, lease term and proximity to national road or rail infrastructure.
Eaves height, dock-door ratio and yard capacity are the dominant value drivers for distribution centres. A Direct Comparison cross-check on a rate per square metre of GLA, drawn from sales of comparable distribution facilities, should be used to test the primary valuation.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Distribution Centres — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.