Leases covering more than 50 000 m2 and worth more than R50-million to a variety of landlords in greater Cape Town have been concluded in the first eight months of the year by the newly expanded Western Cape broking team at Old Mutual Properties.

"Activity in the office letting market shows an increasing recognition by business that now is a good time to relocate and to strike deals at low escalation rates with landlords still having to face the challenge of an oversupply of space," said Old Mutual Properties' broking division manager Orin Varney.

He says business confidence is being signalled by a willingness by office tenants to opt for five-year leases.

Recent five-year deals worth more than R22-million have been negotiated by Old Mutual Properties for a total of 6 000 m2 of space, mainly at The Pinnacle in Burg Street, Safmarine House in Riebeek Street, Fountain Place on the Foreshore and at Absa on Grove in Claremont.

He says asking rentals for A-grade offices in the city remain at around R60 to R65/m2, but expectations are that these will firm in 2005 with increased demand.

"Development opportunities in the industrial market continue to be encouraged by a lack of space in key nodes," said Varney.

"Three and five-year leases were concluded earlier in the year by the team for premises of between 1 000 m2 and 4 000 m2 in Epping and Montague Gardens, but supply of space in most industrial areas is now vastly reduced.

"With business confidence at a high, and the lack of large areas, the industrial market is firming in the favour of landlords.

"Rentals in prime areas have shown growth of more than 20% in the last year, with space in Montague Gardens fetching rentals deep in the twenties per square metre, with Epping a short step behind."