Revival of Cape Town’s Foreshore precinct attracting blue chip tenants

Reaffirming the strategic relevance and increasing appeal of Cape Town’s rapidly transforming Foreshore area, which is undergoing considerable revitalisation, two major corporates have recently concluded lease agreements through Ikon Property Group for prime office space in the area.

Exterior view of Media City on Cape Town’s Foreshore, where Pearson Southern Africa has relocated its headquarters.

Pearson Southern Africa, which is part of a leading global education business, has relocated its headquarters from Pinelands to occupy a single floor of 3 180sqm in the refurbished AAA grade Media City building.

Taking a 10 year lease at a competitive monthly rental of R105 per square metre, they have moved premises to be in a more central location in a pleasing environment conducive to staff access and productivity, says Jerri Mperdempes, senior commercial property broker of Ikon Property Group.

“The Foreshore precinct has been earmarked as the next major growth node in the Cape Town CBD. It has convenient accessibility to public transport – both MyCiti bus service and Cape Town train station, and being on the periphery of the CBD it has almost immediate access to the N1 and N2 freeways.

“Pearson SA has been able to get into a really attractive, quality building within their budget requirements and with excellent parking ratios of four bays per 100sqm, which is a highly competitive rate for the city centre of R950 per bay, especially given that parking in the heart of the CBD is generally at a premium, due to shortage of supply.”

The Chairperson of the Cape Town Central City Improvement District (CCID), Rob Kane, notes that a massive re-urbanisation of the Foreshore area has begun. “As the CCID, we define this area as stretching from Riebeek Street and Old Marine Drive down to Table Bay and Nelson Mandela boulevards, and bordered on either side by Buitengracht and Christiaan Barnard Street.

“Of the more than R7.001 billion of investment being made in the CBD between last year (2014) and declared to date to be completed by 2017, over R2.114 billion of this has recently been completed in this Foreshore area, while more than R3.112 billion is still to be completed between now and 2017 – including the new Netcare Christiaan Barnard Memorial Hospital and CTICC expansion.

“This is going to completely revitalise the Foreshore, and because of the former, we believe we may see the creation in particular of additional space that can accommodate the healthcare industry – medical practitioners and medically related suppliers – as we know that the demand for rooms in the new hospital is already very high. This is also one of the few areas in the CBD where greenfields developments can still take place.”

In relocating their offices to Media City, Pearson Southern Africa required a high specification fit-out.

Says Guido Tagge, design director for dhk, who were the interior designers for the project: “The new headquarters for Pearson SA was designed to accommodate 335 people in a contemporary new working environment that met international office design standards. The move also signified a cultural shift from cellular offices to an open plan layout, so the new office has plenty of informal areas to collaborate along with’ hot desks’ for staff on the move. It’s a much more fluid and flexible arrangement.”

Efficient planning was key to optimising space in the new office, down to integrated storage requirements for each workstation. “By positioning desks around the perimeter of the space, we were able to ensure that every employee can enjoy natural light and views,” says Tagge.

“In terms of energy saving features, keeping the office layout open meant we could take advantage of natural light, and we incorporated LED light fittings throughout. Pearson USA allocated a ‘green budget’ that allowed for the application of sustainable principles in the design. Motion sensors manage lighting after hours, carbon dioxide sensors monitor fresh air and solar photovoltaic panels have been installed on the roof.”

Recycling was strongly introduced into the new build, and recycling stations were custom designed for the office. Pearson will be monitoring energy use independently over the coming months to see how these measures create savings.  Adds Tagge: “We used local materials and suppliers where possible and brought plants into the design features with green storage walls and dividers.”

In another recent transaction concluded by Mperdempes in Foreshore, Clicks2customers has relocated from Triangle House in the city centre – a building being converted to residential accommodation, to Redefine’s ‘The Towers’, occupying the entire eighth floor comprising 1 700sqm on a five year lease, at a rental rate of R110 per square metre.

A key element of The Towers – formerly Standard Bank Centre, is its re-greening as part of the redevelopment project, and it has been chosen by the Green Building Council as a pilot project of the Green Star refurbishment tool.

Says Elton Holland, director of Ikon Property Group: “The benefits of green features, in addition to the very pleasant working environment for staff, area amenities and ample parking, prompted the move for Clicks2customers, coupled with a competitive rental rate that suited their budget.  For example, a Virgin Active gym will be located in the new Netcare building, while there is retail at street level, such as in The Towers. Both The Towers and Media City have large floor plates ideal for modern office accommodation and high speed fibre optic connectivity.

“This precinct is very competitive in terms of rentals. Redefine has achieved an excellent value offering by refurbishing the former Standard Bank Centre and provides A-grade space below the rental rate of new developments in the CBD and Century City.

“We are continually working with corporate tenants whom we have been able to offer A-grade space at attractive rentals with suitable parking ratios. Properties in the Foreshore area with strong tenant profiles in good locations can achieve yields of between eight and nine percent, which makes them very attractive to investors. As a result we are also working with several high net worth investors and property funds that are highly attracted to the precinct. However these buildings do not often come onto the market, as astute investors with vision acquired them several years ago in anticipation of the area developing into a growth node.”

Holland adds that the Culemborg complex would naturally be the next growth node earmarked for future development.

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