You can buy virtually anything on Temu – from a rechargeable flashlight (ZAR94) to a reusable pet hair remover (ZAR31) to a yellow hoodie emblazoned with the slogan ‘Make Money Not Friend’ (ZAR178). The direct-from-China online marketplace has taken South Africa’s retail sector by storm, and now it has its own in-country warehouse.

In July, Temu announced that it had launched a warehouse in South Africa (though it didn’t say where exactly), which enables it to tag certain items as ‘local’, with some available for next-day delivery. ‘The launch of local warehouse dispatch marks an exciting step forward in our mission to deliver a faster, smoother and more satisfying shopping experience,’ an unnamed Temu spokesperson said in a media release.

Temu’s launch reflects a growing demand across the board for warehouse space, driven by an African e-commerce market that’s expected to increase at an average of 17.9% annually, reaching nearly 610 million buyers in 2027 compared to 387.5 million in 2022, according to estimates by consultancy firm TechCabal Insights. That growth in demand – and in stock volumes – brings an increased demand for warehousing solutions that cater to last-mile delivery and omnichannel sales.

That’s why online retailer Jumia, which sells anything from a 15.6-inch laptop (NGN217 000, or ZAR2 530) to a pair of size 5 women’s sneakers (NGN4 305, or ZAR50) – recently launched its own 30 000 m², integrated warehouse and logistics network facility in Isolo, near Lagos’ Murtala Muhammed International Airport.

According to KnightFrank’s Africa Industrial Market Dashboard H1 2024 report, the growth of the e-commerce and agriculture sectors saw demand for warehouse space across Africa jump by 18%. ‘The warehousing sector remains a critical component of the industrial market,’ the report notes. ‘In key markets such as Johannesburg, Nairobi and Lagos, the occupancy rates for modern warehouses have reached approximately 85%, up from 78% in H1 2023. Prime warehouse rents in Johannesburg have also risen to approximately US$5.50 (ZAR98) per m² per month, reflecting a 7% increase from H1 2023. Nairobi and Lagos also reported 5% and 6% rent increases, respectively, with current rates being recorded at US$6 (ZAR107) and US$5 (ZAR89) per m² per month.’

The KnightFrank report cites the expansion of e-commerce as a primary driver of that increased demand for industrial space. ‘The rapid growth of online shopping [contributed] to a 20% increase in e-commerce sales,’ it states. ‘This trend is exemplified by notable investments, such as Amazon’s US$200 million (ZAR3.5 billion) fulfilment centre in Johannesburg. The new facility is anticipated to create over 2 000 jobs and significantly enhance regional logistics efficiency.’

As a result of the high demand for high-quality storage space, the Q1 2025 South African Industrial Market Dynamics report from industrial real estate agency JLL found that logistics is ‘the only subsector within the South African commercial real estate landscape where real market rental growth is achievable at present’. The report points to continued low vacancies in the logistics space (just 0.5%, by JLL’s measure), which it says are ‘empowering landlords in lease negotiations and resulting in positive reversions on reletting and renewals’. JLL expects this trend to persist through 2025.

‘The supply shortage has pushed development strategies to the forefront for many landlords, though challenges exist in securing suitable land parcels, with competition from data centre developers,’ the JLL report states. ‘Strategic locations offering proximity to transport hubs, skilled workforce and robust infrastructure will become harder to source and secure.’

Location still matters, the report notes… but for different reasons. ‘Location decisions are increasingly influenced by proximity to suppliers or courier hubs, access to clients or specific markets, the availability of parking for staff and customers, safety and security in the area, and traffic flows,’ it states. ‘Nodes once considered peripheral are now experiencing rising demand, especially those offering lower costs and good accessibility.’

One of JLL’s key insights is that sustainability is a critical consideration for warehouse occupiers. ‘Energy-efficient warehouses and those equipped with solar power and water-saving measures are borderline imperative,’ it states.

Andrea Taverna-Turisan, CEO of Equites Property Fund, highlights a similar trend in the fund’s 2024 integrated report. ‘The demand remains robust for first-generation properties linked to sustainability, sought after by local and multinational entities across sectors such as B2B, B2C, 3PL and everything in between,’ he writes. ‘The challenges in energy generation in recent years have prompted organisations with resources to reassess their real estate strategies, prioritising energy security for their operations. This has allowed for a re-evaluation of operational methods, paving the way for the potential adoption of 22nd-century solutions and innovative real estate designs. We, along with many other landlords who have invested in top-tier logistics development, have reaped the rewards of this transformation, as evidenced by the minimal vacancy rates and significant rental growth observed in this market segment.’

As with so many sectors, the logistics and warehousing space is being shaped by the 21st-century demands for tech-enabled efficiency and environmental sustainability. That’s clear from all the reports one reads and the industry insiders one speaks to. It’s also been demonstrated by two recent landmark projects in South Africa.

In October 2024, automotive giant BMW opened a newly built logistics warehouse at its flagship Rosslyn plant. The 5 200 m² building – which will store parts for BMW’s X3 plug-in hybrid vehicle – has translucent panels that provide natural light, individually dimmable smart LED lights, surveillance cameras with integrated artificial intelligence (AI) technology and weather-resistant dock houses to maintain the integrity of parts delivered to the warehouse. The warehouse’s construction included 7 700 eco-friendly Envirolite bricks, which are made up of more than 70% recycled material, including polystyrene waste generated from the plant.

While BMW emphasised location and sustainability in its new warehouse, telecoms giant Huawei focused on green energy, e-security and modern logistics (which fall under the GEM umbrella) when it built its new, 14 000 m² smart warehouse in Johannesburg. The facility uses smart technologies to enhance its efficiency, AI access control to bolster its security and a digital management system to automate about 60% of its daily processes.

It’s Huawei’s first smart warehouse in Africa. At its grand opening, CEO of Huawei South Africa, Will Meng, positioned it as the hub of the company’s South African operations and a symbol of the growing warehousing sector. ‘The warehouse and logistics market in South Africa was valued at US$93 billion (ZAR1.6 trillion) in 2024 and is poised to reach US$157 billion (ZAR2.8 trillion) by 2032,’ Meng said. ‘This growth signifies more than just numbers; it also represents a transformation towards more agile, responsive and technologically advanced supply chains, which are essential for maintaining a competitive edge in today’s rapidly evolving marketplace.’

As with all properties, the BMW and Huawei warehouses – and thousands of others like them – lean heavily on the old real estate adage, ‘Location, location, location’. But as global supply chains grow shorter and e-commerce grows bigger, the commercial property market’s logistics section is picking up a new catchphrase – ‘You can’t deliver what you can’t store’.

By Mark van Dijk
Image: Gallo/Getty Images