Demand for logistics storage space remains high, as the ecommerce consumer base continues to grow year-on-year, amid the challenges caused by Covid-19, says design business Paragon Architects director Estelle Meiring.

She stresses that the pandemic has exposed the vulnerability of extended and complex import value chains. As a result, companies may look to shorten or diversify those supply chains through sourcing more local products. This local focus can lead to growth in the local economy, resulting in higher demand for warehousing and storage space.

“We can make a difference by supporting local businesses. We can see where we can use local products and materials in our buildings, rather than defaulting to well-known imported brands. Last-mile – the last leg of a delivery journey – delivery capacity has also become a focus, as customers have become accustomed to and demand quick delivery turnaround times.”

Meiring explains that, traditionally, South Africa has been behind the growth curve for ecommerce internationally, particularly compared with the US and Europe.

This lack of progress has largely been because of high Internet connectivity costs and a consequent lack of online consumers, and a lack of reliable transport to consumers.

However, in recent years, Internet access and courier services have improved.

Concerns of a digital divide and a lack of access to credit cards required for online purchases are being addressed – to an extent – as a result of increased access to smartphones and alternative payment options, such as SCode from ecommerce company PayFast, she contends.

These factors, in addition to increases in first-time online buyers owing to Covid-19, contain significant “potential for unprecedented growth”.

“Ecommerce fulfilment requires four times the warehouse capacity in the destination market, compared with that of traditional logistics models. With the growth in e-commerce, it’s not surprising that there would be a strong demand for logistics space, from large storage hubs to small last-mile fulfilment warehouses in urban centres,” says Meiring.

Storage Trends

Meiring emphasises that Paragon makes an effort to keep up with new technological developments in warehousing design, ensuring that the company can advise clients on how to optimise facilities and product flows.

Paragon has noted more demand for cross-docking and multiple loading-areas, as companies try to cater for more demanding customers that expect next-day deliveries.

“Cross-docking requires more land and is, therefore, not viable at all warehouse sites,” she adds.

There is also increasing demand for facilities close to main economic hubs so that goods can be transported quickly and efficiently, but land is required, which is not always affordable or available for warehousing.

“Another trend emerging internationally is the development of multistorey warehousing. When land prices reach a certain point, it becomes more economical to expand vertically rather than horizontally, which has also been the case with office space.”

While Meiring predicts that local warehouses will not follow suite any time soon, owing to current land availability and prices, Paragon has noted an increasing demand internationally for higher building eaves heights and better-quality flooring suited to higher racking.

This trend does remain a challenge for owners of older warehousing facilities that do not have high eaves.

“While Covid-19 has wreaked havoc on the local economy and there’s uncertainty in the market, resulting in hesitancy to commit to investment in building projects,

e-commerce has boomed and there’s a need for more warehousing and distribution centres.

“In the long term, more warehousing and storage facilities need to be built. In the short term, some operators might turn to on-demand warehousing facilities to provide the space that they don’t have on hand,” she explains.

Projects

Meiring enthuses that Paragon is the architect for a new warehousing, storage and manufacture facility for local business Mattress and Couch at the Old Mint Industrial Park in Centurion, Gauteng.

The warehouse, developed by property developers Atterbury Property for Mattress and Couch, is being tailormade to suit the latter company’s expansion and growth requirements.

Paragon is also working with Mattress and Couch to ensure that the new building is optimised for its operations, and supports maximum flexibility.

The building groundworks and platform have been completed, while the main contractor, construction company GD Irons Construction, is now beginning their work on the site.

The project is expected to be completed by mid-2022.

“What we find so exciting about this project is that Mattress and Couch is a great example of local entrepreneurship, ingenuity and growth – the type of success story that our local economy needs. The company already employs a large staff complement and is constantly expanding and creating new opportunities in the labour market,” she concludes.