According to Dave Russell, a director of Baker Street Properties“Five of the seven office nodes surveyed have experienced increases in vacancies in the past 12 months. While this is not good news for landlords, it has created some attractive opportunities for office tenants, who are in a position to take advantage of present market conditions.”

Russell says that the most significant change has occurred in the Cape Town CBD figures, where a combined vacancy, including Premier, A and B grade buildings, seen at 5,4% a year ago, has now reached 9,1%. This increase is largely attributable to a substantial refurbished office block coming on to the market, along with the relocation of certain large tenants to locations such as The Boulevard and Century City.

In the northern suburbs, Bellville has seen a small increase to 6,2% compared to 5,3% last year, however, Century City has been one of the nodes experiencing a reduction in vacancies, where they have moved from 14,6% down to 11.9% today.

In the southern suburbs, Claremont has now reached 16,6% compared to 14,5% this time last year and the Rondebosch/Newlands node is now at 4,8% 

compared to 2.7% last year. Pinelands has increased from 2,3% to 5,2% and the V&A Waterfront presently has a vacancy of 2,9%.
 
Russell adds, “Against this background of increasing vacancies Baker Street Properties have experienced a noticeable increase in enquiries from office tenants, who are taking a positive approach to market conditions. Many companies who shelved their expansion or relocation plans a year ago are now coming to the market, taking advantage of the concessions currently offered by landlords.

“New developments coming on stream are often the main contributing factor to increasing vacancies. However, with no significant speculative office development taking place, it is only a matter of time before this upward trend in vacancies is reversed. Once that happens rentals will again start to increase.”

“Tenants are therefore encouraged to position themselves accordingly and use this opportunity to take a long term position on favourable terms,” concludes Russell.