According to Jones Lang LaSalle, the Cape Town office market is displaying constricted demand for new and sizeable office space.

Minimal activity was noticeable in the first half of 2013 driven by small enquiries where occupiers continue to look for value.

Total stock recorded by the South African Property Owners Association (SAPOA) increased to 2,255,182 m² during the first half of 2013 from 2,187,000m² at the end of 2012.

The overall vacancy trend in the Cape Town office market is increasing, having now reached 11% in Q2 2013. This is a full percentage increase from the same period in 2011 where vacancies were at 10%.

The increase in vacancies are attributed to the sharp increase of vacancies in the CBD over the past two years reaching, 14% in the current period from just under 10% seen at the beginning of 2011.

Prime buildings remained flat in the first half of 2013, with the top monthly gross rental of R160/m². Most office buildings' gross rentals are showing signs of pressure with demand and vacancies having softened in this period of economic uncertainty.

Source: Jones Lang LaSalle