Suburban development

Posted On Wednesday, 23 May 2001 03:01 Published by eProp Commercial Property News
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THE revitalisation of the Cape Town city centre has come in the nick of time as
decentralised office blocks and secure business parks have mushroomed over the past few years
due to escalating crime and traffic congestion in the central business district (CBD).

 

Property-Housing-ResidentialMost prominent among the secure estates are the Westlake and Steenberg developments in the
southern suburbs and Century City to the north, adjacent to the Ratanga Junction theme park and
Canal Walk complex.
Numerous smaller, light industrial and office projects have sprung up along the main road and rail
transport routes, putting pressure on landlords in the city.
The authoritative Rode property report puts the B-grade office vacancy level of the Cape Town CBD
at about 20% following a steady exodus of tenants over the past few years.
Property agents say smaller financial services and information technology companies have led the
trek to the suburbs, with management under pressure from staff struggling with inefficient public
transport and a lack of parking in the city.
Owner-occupied developments have come back in vogue since interest rates stabilised, and many of
these have been located in the suburbs, where land prices are lower.
At the 14ha Westlake Business Park in the southern suburbs, for instance, owner-occupiers have
snapped up plots varying in size from 1 000m² to 2 000m².
Lara Lupini, of Rabie Property Developers, which is handling all commercial and industrial sales
for the project, says four factors have contributed to Westlake's popularity an emphasis on
security; the rural, treed location; the modern design of the units, with an offices-to-warehousing
ratio of up to 1:2; and ease of access for commuting.
However, while Westlake and other similar estates have played their part in encouraging the flight
to the suburbs, the increase in B-grade vacancies tells only half the story.
Many large corporations especially those that own their buildings, those with mainly white-collar
employees, and those with adequate parking in their buildings have tended to stay in or close to
the CBD. As a result, A-grade vacancies remain low in Cape Town compared with Johannesburg and
Durban.
Reports of prominent companies abandoning the city centre have all but ceased since the city
improvement district was implemented in November. This Cape Town Partnership initiative, which is
funded by a levy on top of companies' rates bills, has reduced crime significantly by emphasising
visible policing.
Agents say that this move, a doubling of the frequency of street cleaning and garbage collection,
and firm action against vagrants and aggressive informal parking attendants, seems to be turning
the tide of public perception of the city.
Concern remains over traffic management, though, with the new international convention centre and
related developments on the Foreshore likely to exacerbate commuters' present difficulties.
Randal Wells, area director of Group Five Developments, says 2001 is building up to be a good year
for Cape commercial property, but probably only for developers who have learned from the past few
years.
"There have been predictions in the press and elsewhere that we are going into a boom period. I
cannot see it myself, but I think a few successful developers will be able to find new
opportunities in a market that will be slightly better than that of last year."
Wells says he expects market demand for decentralised locations to continue, mainly because the
problems of inner city traffic congestion and inefficient commuter transport have not yet been
resolved, and it will be some time before a solution can be found and implemented.

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