31 July 2018
Business Report (Cape Times) - 31 Jul 2018
by Rob Cokayne
CONSTRUCTION has commenced on a new home and head office for Barloworld's logistics business in the new 16 000m2 mixed use Irene Boulevard development in Centurion. The Barloworld Logistics headquarters will be an anchor commercial tenant taking up 5 500m2 of the property in a 4-star, green-rated building. Developed by Abland with Giflo Developments, Barloworld Logistics is scheduled to take occupancy of its new headquarters in the first half of next year.
The planned move represents the first time the headquarters of the supply chain company would be leaving Barlow Park and the greater Sandton area. The relocation is linked to the planned redevelopment of the Barlow Park campus in Sandton, the corporate home of listed distribution group Barloworld, at a cost of more than R3 billion into a new iconic 130 000m2 mixed-use precinct.
This follows Barloworld, leading property developer and investor Atterbury and African Rainbow Capital signing a joint venture property investment and development deal in December in terms of which each would hold a third of the site. Dominic Sewela, the chief executive of Barloworld, said in December that the redevelopment of Barlow Park was part of the group's strategic focus to maximise the use of and unlock value in all its assets.
The development of a new headquarters for Barloworld Logistics does not necessarily mean this business would remain part of Barloworld in the future, particularly as its parent company last year gave notice of its possible exit from logistics if this business failed to improve its return on invested capital. Sewela reported in May this year that the logistics business had achieved a drastic turnaround in reporting a 94 percent increase in operating profit to R99 million in the six months to March from R48m in the prior period, despite revenue decreasing by 6.6 percent to R2.9bn in the same period.
Sewela said that he was comfortable that the business could reach the initial target of a return on invested capital of between 8 to 9 percent if it was able to remain on the current trajectory, and would then be retained by the group. "Should they not attain that target, we would definitely exit the business. We would make those announcements in September" he said.
Kamogelo Mmutlana, the chief executive of Barloworld Logistics, said yesterday that the planned fit-for-purpose building would be a space that operated as a high performance centre, encouraging collaboration between employees engaging clients and offering business centre where innovation and ideas flourished. "The sod (turning) ceremony is the first tangible milestone in the exciting journey our new headquarters. "We have deep seated root in Barlow Park, but this move will see us becoming part of an important business nod within Gauteng."
"This project is arguably one of the most ambitious in the history of Barloworld Logistics"
"We are looking forward to our new headquarters being beacon for all our stakeholders a landmark within the precinct and place where we can grow as a business and create a bold new future," he said.