Inospace, the logistics property platform specialising in last-mile and SME-focused industrial space, has reported robust interim results for the six months to June 2025. However, while the company’s operating model continues to attract tenants in a challenging macro climate, management has flagged a tougher second half for South African SMEs.
The Cape Town-headquartered group, which owns and manages 50 logistics parks, posted a 12% increase in revenue, with net operating income growing by double digits. Group-wide occupancy ended the period at 92%, supported by strong demand in logistics corridors such as Jet Park, Epping, and Montague Gardens.
Lease activity remained brisk, with 142 new deals signed in Q2, most of them expansions or renewals by existing tenants. “The traditional industrial leasing model isn’t designed for agility,” said CEO Rael Levitt. “Our bundled, service-led platform is better suited to SMEs needing speed, flexibility, and room to grow.”
Cost and capital pressures mount
Despite healthy fundamentals, Levitt warned of growing macroeconomic pressures. “Liquidity is tightening, input costs are rising, and global supply chain friction is filtering down to smaller exporters and distributors,” he said.
To cushion against these risks, Inospace has taken several operational steps. Facilities management was outsourced earlier this year, yielding lower overheads and improved service ratings. Finance systems have been upgraded, including tighter credit controls and the introduction of a consolidated billing model, set to go live in the third quarter, to streamline client payments.
Technology and asset recycling
The group also ramped up investment in technology. Its proprietary “Lisa” platform, developed initially to assist third-party property owners with leasing management, has been retooled to improve client retention and deal velocity. An upgraded onboarding interface has shortened move-in times, while a new asset management system is being piloted across its warehousing and storage assets.
Inospace’s capital strategy is similarly evolving. In the first half, over R320m in mature or non-core assets, including buildings in Jet Park and Wynberg, were disposed of. The proceeds have been redirected into higher-growth nodes, with more than R400m in acquisitions concluded and several more under contract.
New products, new pressure
The company is also expanding its footprint in flexible logistics. A new co-warehousing product launched in Sandton now caters to e-commerce sellers and online retailers previously priced out of traditional space. The offering combines warehousing infrastructure with plug-and-play flexibility, borrowing cues from coworking models.
Still, Inospace remains cautious. Levitt cited elevated fuel and energy prices, uncertainty around the US’s African Growth and Opportunity Act (Agoa), and the broader slowdown in SME funding flows as material risks. He noted that some clients are looking to diversify by tapping into intra-African trade and engaging Brics+ markets such as China.
There is cause for guarded optimism: inflation is moderating, and the South African Reserve Bank may have room to ease rates in the coming months. However, Levitt believes that structural constraints on SME credit access remain unresolved.
“We’re entering a period where business discipline matters more than ever,” he said. “Our focus is on tech-enabled delivery, relevant product design, and capital efficiency. The fundamentals are strong, but this is no time for complacency.”
