As Africa’s industrial and logistics market sees increased growth, occupancy levels for modern warehouses across the continent have reached an average 83% occupancy rate in 2025, up from 75% last year.

This record-breaking occupancy has been driven in part by an increase in ecommerce, the growth of the agro-industrial sector, and more regional self-sufficiency in many countries. That is according to a report from real estate consultancy Knight Frank, which projects Africa’s online retail market could surpass $75 billion this year.

“This surge reflects the growing maturity of Africa’s industrial real estate as a core investment asset class, while underscoring the persistent supply-demand imbalance for Grade A facilities, particularly across urban hubs and trade corridors,” said Boniface Abudho, research analyst at Knight Frank in Kenya.

Ecommerce and agriculture

As online retail business surges across Africa, there is a growing need for the logistics infrastructure that enables the sector to thrive. That means more last-mile delivery capabilities and climate-controlled storage facilities.

Nigeria alone boasts an ecommerce sector worth around $8.5 billion with a growth rate of about 11.8% up to 2033, according to the report. But South Africa’s domestic ecommerce market dwarves that: Valued at over $35 billion in 2024, it is expected to double by 2033.

Meanwhile, agriculture is also a big factor in the growth of logistics and warehouses in Africa. The report shows that the agricultural sector accounts for 32% of Africa’s total GDP and provides livelihoods for about 65% of the population.

Agro-processing is one segment that has been doing well. It could help raise raw value capture by as much as 600% in sectors like cotton-to-textile. In Nigeria, for example, the $538 million Special Agro-Industrial Processing Zones (SAPZ) program is expected to boost agricultural productivity by over 60%. That will be another source of the increasing demand for cold storage and agro-logistics facilities.

Sustainability and trade within Africa

Within the industrial and logistics sector, companies are increasingly moving to address ESG compliance. The report highlights several examples: Cold Solutions Kenya’s Tatu City facility recently became the first in the continent to get the LEED Gold certification.

Meanwhile, Woolworths in South Africa invested around $1 million in clean energy for their facilities and Botswana launched an operation for locally assembled electric vehicles, positioning itself as a leader in Africa for clean mobility.

“Sustainability is now a defining feature of new industrial developments,” said Mark Dunford, CEO of Knight Frank in Kenya.

“Occupiers are increasingly prioritizing ESG-compliant spaces that deliver operational efficiencies and lower energy consumption. In response, developers are embedding green design principles into both speculative builds and bespoke, build-to-suit projects.”

The main industrial powerhouses in Africa are South Africa, Egypt, and Nigeria. South Africa has the most expensive industrial rents in the countries surveyed and boasts yields of 8.25%, while Egypt and Nigeria have yields of 10% and 8%, respectively.

Egypt has the highest occupancy rates: In particular, in 6th of October City, an industrial area in the Great Cairo region, occupancy hit 95%. Earlier this year, the Egyptian government invested $120 million in a pharmaceutical hub in the Suez Canal Economic Zone (a special economic zone established in 2015), aiming to localize medicine production and position Egypt as a regional leader in pharmaceuticals. This move played a part in strengthening the Egyptian logistics sector.