Over the last 12 months rental vacancies in the office property market in the greater Irene area have decreased by 40%, largely due to the fact that property developers and speculators have been building less, resulting in less rental stock being available.
This is according to Org Geldenhuys, managing director of property development and management company, Abacus DIVISIONS. "Due to the lack of new buildings there is now, increasingly, a diminishing level of available office property to rent.
This is the main reason for the drop in vacancy levels over the past year. It is also possible that, over the next 12 – 18 months, office vacancies will drop further.
"This scenario is based on what we are seeing happen in the greater Irene area. But I believe we will see a similar situation playing out in other areas. The vacancies might not drop as much as 40%, but, based on what we are experiencing in our area, they should decrease.
"Additionally, property developers and property speculators are now starting to invest as the market slowly improves.
"For a long time now property developers were just not gung ho about investing in new office buildings. But the scenario is slowly changing," said Geldenhuys.
But he did say that the office sector would continue to experience more pressure than other sectors in 2014.
"Although we have seen a fair amount of leasing in the office sector, a lot comes from relocating tenants - and not from new business."
In addition, property owners are responding to increasing prices faced by tenants – including electricity - by making their buildings more efficient and drawing on alternative energy and water sources, thereby reducing running costs.
