Cape Town office vacancies decline
The first quarter of 2012 has seen a continuation of flat market conditions in Cape Town for the office sector with vacancies in certain nodes showing increases on the previous quarter’s figures.
Dave Russell, a director of Baker Street Properties, says,” We have seen a steady increase in office vacancies since 2009 as confirmed in the quarterly SAPOA Office Vacancy Survey, however, with few new buildings coming on stream in the short term there is every possibility that vacancies may be reaching their peak.”
Russell adds that significant change has been recorded in the CBD, where combined vacancies are now reaching 12% and are at levels last seen in 2003. Of greater concern is that in Claremont combined vacancies are heading towards 20%. This is up from 13.7% in the previous quarter.
“The Rondebosch/Newlands node has experienced a substantial increase from 7.3% last quarter to 13% now. Bellville and Century City have shown more resilience and currently have similar vacancy levels of 8,6% and 8,4% respectively. The ever popular V&A Waterfront is one of the exceptions to the trend, as it is down to a combined vacancy of only 2,7%. On another positive note, office vacancies in the Pinelands node remain low and are presently at 3.6%,” says Russell.
Russell continues,” Until we see a significant decrease in vacancies we will continue to experience flat rentals which are well off their peak in 2008, when the global economic recession set in. Good economic growth and a return of business confidence are required before any change will be seen. It is difficult to predict when this will happen, so we could see the current trend continuing for at least the next 12 months.”
“Baker Street is a well established property company marketing virtually all of the vacant office space in Cape Town, both leasing and sales. Current market conditions are good for tenants who are encouraged to take advantage of this soft market and the concessions currently offered by landlords. They are advised to use this opportunity to take a long term position on favorable lease terms,” concludes Russell.