Not for thirty years have Cape Town tenants had such a market for offices. Despite the optimism from SAPOA the rental market is still decidedly in the tenant's favour.
Cape Business News reports that in some older CBD and main street blocks tenants can still largely write their own ticket and even do a better deal on re-signs.
The typical 12% annual increment clauses have been crumbling for a while so that current rents paid by existing lessees are normally in excess of the new letting rate. Such a market situation in Cape Town hasn't existed since the early 1970s when office rents hovered around R3m².
Despite the doom prophets the same situation is likely to apply this decade so that the present rates may begin accelerating again.
The opportunity for sectional title office buyers may be even better. Current new developments of office space from Kenilworth to Blaauwberg to Tokai have an asking price of R6 000m². Some half-empty older style but well located office blocks may soon opt for selling off on sectional title - probably at half the price of new offerings.