SAPOA Office Vacancy Survey reveals stabilised vacancy rate in Q1 2012

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National office vacancy 2012 - SAPOA / IPD National office vacancy 2012 - SAPOA / IPD

According to SAPOA Office Vacancy latest Survey 2012, which now covers just under 15.1 million m² of stock across 50 commercial nodes, the national office vacancy rate stabilised somewhat in Q1 2012.

The latest SAPOA Office Vacancy Survey, compiled by IPD, sheds a degree of positive light on an office sector that continues to operate in a challenging market with vacancies generally above natural levels.

The national office vacancy rate stabilised somewhat in Q1 2012 following marginal yet steady growth over the previous four quarters. While this was only a very slight improvement of just 2bp and conditions for the office sector remain tough, it indicates that some nodes are showing improvement while overall vacancy rates may be beginning to level out.

Prime space continues to outperform lower grade stock, especially in prime decentralized nodes where most areas saw an improvement this quarter. The P grade vacancy rate is currently a low 1.67% while A grade space saw a marginal increase to 8.73%. The largest improvement was realised by C grade space which fell by nearly 2% to 16.41% in line with continued office-to-residential conversions and some demand for C grade space, particularly from call centre operators. The vacancy rate of B grade office space has remained relatively flat over the past two quarters and currently sits at 12.60%.

In terms of cities, Johannesburg and Port Elizabeth saw some improvement while Pretoria, Durban and Cape Town continued on their current trend of increases. All these movements were less than 1% though, supporting the view that a flattening of vacancy rates is developing.

The economic outlook for the year ahead is less than favourable with low growth expected for the year ahead and as a result the office market is unlikely to experience any significant improvement in the short term. However, while a degree of uncertainty persists in the economy and therefore the office market, overall vacancy rates appear to be stabilising somewhat which suggests that they may be approaching the bottom of the current cycle.

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SA Property Market  |  South African Property Owners Association (SAPOA)  |  IPD South Africa  |  Office Market  |  SAPOA Office Vacancy Survey