Cape Town office vacancy Q1 2013 reveals ‘little change’

Top quality buildings in all nodes continue to enjoy little or no vacancies with the bulk of the vacancies located in secondary buildings. An artist’s impression of 22 Bree Street Cape Town, the new home of Bowman Gilfillan.

Cape Town Office vacancies in the various nodes included in the first quarter of 2013 SAPOA Office Vacancy Survey show little change to the previous quarter’s figures.

Total vacancy in the CBD is in line with the previous quarter’s figures at 12.8%, along with Claremont 21%, Bellville 7.9%, Century City 5.8%, Rondebosch/Newlands 9.3%, Pinelands 3.3% and the V & A Waterfront 1.2%.

Dave Russell, a director of Baker Street Properties, comments, “It is important to note that the buildings surveyed underwent a re-grading at the beginning of the year, resulting in a noticeable change to the CBD figures, where the total A grade area decreased and the B grade increased. The subsequent reduction in the A grade and increase in the B grade vacancy should not be taken as a market trend, but merely a result of the re-grading.

“Top quality buildings in all nodes continue to enjoy little or no vacancies with the bulk of the vacancies located in secondary buildings. It is in this secondary space where the landlords compete for tenants, that very favourable lease terms are being achieved. The Portside office tower is on schedule with 50,000m² due for completion in March 2014 and 22 Bree Street is looking very impressive as it heads towards completion and the move to the building of Bowman Gilfillan.”

Russell adds, “Building at Roggebaai Place on the Foreshore has recommenced and is progressing well. The building will provide a further 12,500m² of mixed retail and office space with excellent parking next March. While these new developments will provide some of the quality stock required in the CBD, they will undoubtedly add to the already high vacancy rate. It will be interesting to see what impact they will have on the CBD market as they come on stream over the coming year”.

“In the northern suburbs we have seen vacancy levels in Bellville remaining around the 8% level for the past year. The completion of the new Santam office development by Ingenuity will add a small portion of quality stock to the market, however, this will no doubt be taken up shortly in keeping with the demand for top grade offices.”

According to the Q1 2013 SAPOA Office Vacancy Survey Century City continues to develop new offices to meet the demand with 22,000m² under construction and a further 24,000m² planned. Over the past 18 months office vacancies in this node have seen a reduction from 12% to 5,8%, with further reductions predicted in the short term. These figures confirm the continued demand for offices in this popular node.

“In the southern suburbs, Claremont’s office vacancy remains high at 21% with the secondary buildings being responsible for most of the vacancies. Even with this high vacancy top quality buildings continue to let well at above average rentals. In the Rondebosch/Newlands node there has been a positive take up resulting in a reduction in the past year from 13.1% to 9.3% today.

“At Baker Street Properties we do not anticipate any change to present office market conditions for the remainder of the year due to the prevailing economic conditions,” concludes Russell.