18 Jan 2005

According to those in the know, 2005 is going to be another boom year for the commercial property industry in Cape Town. Comments Andrew Tozer, director of Pears Commercial, “This year I think we are definitely going to see an increase in commercial rentals due to the increased business confidence in Cape Town and shortage of development land. “The conversion of many commercial buildings in both the CBD and Claremont to residential has depleted the stock of offices by more than 50 000m2 and with the increased demand, rentals will be forced upwards.

In the past six months, commercial brokers have found it more and more difficult to find suitable accommodation for their large space users. This shortage has seen increased pressure on rentals and with the strong demand for investment properties from listed property funds and private investors, the yield on commercial property should continue its downward trend therefore increasing capital values.

“Wynberg and areas in the Northern Suburbs along Voortrekker Road seem to be the only two exceptions to the commercial explosion in the Cape. Unfortunately, both of these areas continuously seem to be overlooked by developers, which exacerbates the shortage of developable commercial land,” observes Tozer. “I am confident that we will continue to see the increase in commercial developments in Century City and Tygervalley, as there is still land available for it. Unfortunately, very few developments will be taking place in the Southern Suburbs, due to lack of appropriate land.