VALUATION OF…
Industrial
Industrial parks, warehousing and logistics facilities, valued on eaves height, yard space, and access.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Industrial properties are valued primarily on an income basis. Where let on a single-tenant lease, the Income Capitalisation Method generally applies; where multi-tenanted within an industrial park, the Discounted Cash Flow Method better captures the varying expiry profile across units.
Under the Big Five framework, the Income Generating Units are the warehouse GLA, any office/showroom component and the yard or hardstand area, each of which is analysed and, where materially different in character, valued at a different rate. Contract rental is compared to market rental with regard to eaves height, floor loading and power supply, a vacancy allowance and normalised operating expenditure are applied, and the resulting income is capitalised at a rate reflecting tenant covenant, node and proximity to logistics corridors.
Eaves height, yard ratio and power supply are the dominant value drivers for industrial property. A Direct Comparison cross-check on a rate per square metre of GLA, drawn from sales of comparable industrial buildings in the same node, 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 Industrial — 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.