Simple logic suggests that the demand for office space is, amongst others, a function of the number of jobs being created in related sectors. Interestingly enough, US experts note that this decade, and more recently in the last year, somewhat of a mismatch is taking place between the two sets of numbers, with absorption dwarfing job growth.

They explain this to a combination of at least four key factors: occupiers in select industries now anticipating growth and leasing in preparation, pent-up demand, a decline in sublet space together with improved credit security of existing sublessors, and an increasingly tight labor market driving demand for top quality space.

Office space absorption in SA can be calculated as net take up - being the relative difference between gross sample of space in the markets and the occupation level thereof.

On this basis we see that the take up trend across the major markets to be positive.

Marc Schneider
Research
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