Pretoria CBD gets makeover as government comes marching home again

Posted On Tuesday, 16 October 2012 16:36 Published by eProp Commercial Property News
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Broll Research on Pretoria CBD reports BEE-rated landlords in good shape as rentals continue to firm.

Broll Property GroupPretoria CBD is undergoing something of a re-gentrification on the back of a return of government to the inner city. Notwithstanding the city's repute as an important industrial and commercial centre and its surfeit of public transport (Gautrain, bus, taxi and Metrorail services), it has for years experienced a slow process of decentralisation.

In Pretoria's case, the exodus benefited nine outlying office nodes – Arcadia, Brooklyn, Hatfield, Lynnwood/Menlopark, "the old east", Menlyn/Faerieglen, Pretoria's eastern suburbs, "the new east", Centurion and Highveld Technopark in the south.

Many departments have however now returned to the city, including Health, Transport, Justice & Constitutional Development, and the National Treasury. The CBD is also home to foreign embassies and diplomatic missions.

Leasing

To accommodate the home-coming, and in keeping with the Central Improvement District policy, many buildings are undergoing refurbishment. With vacancies remaining extremely low at under 1% since 2009, rentals have remained stable at R80/m², increasing to R85/m² only at the end of 2011. With no land left for development, many of the older C-Grade buildings have had to be demolished, making way for new developments. The outlook is for rentals to strengthen further.

Landlords are therefore in the relatively comfortable position of a "captive" tenant base, largely composed of government and prepared to sign long-term leases with landlords who are – it should be noted – in possession of good BEE ratings.

In addition, owners should be mindful of the need to remain competitive due to the availability of newer buildings in other areas.

Last modified on Thursday, 15 May 2014 08:19

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