The boom at Century City near Cape Town, where the bulk of new commercial development in the Western Cape is taking place, is expected to see its office component nearly doubling to 175,000m² in 18 months.

The completion of commercial developments totalling 13,500m², primarily for owner-occupiers, has already increased the office component to just under 97,000m², says Greg Deans, MD of Century City Property Developments.

A further 29,000m² of office space is expected to be completed by January 2007. It includes the first phase of the Colosseum, Knowledge Park 2, Boulevard Square, the first phase of Millennium Park business park, Spur's head office at Century Gate and the Louis Group's Century Falls first phase. It will be followed by a further 49,000m² of new offices expected to come on stream by August 2007, says Deans.

He says that while the bulk of new commercial development taking place is for owner-occupiers, there is also a limited amount of development available for the office rental market.

There is strong demand for offices at the mixed-use Colosseum development, where 85% of the 8,300m² of offices has been sold. The strong market response is accelerating plans for the development of phase two of this project, says Deans.

He says the lack of new development has created pent-up demand in the office market, with commentators predicting it was putting upward pressure on rentals, expected to increase 30% to 40% between June 2005 and June 2007. Rentals are already passing through the R100/m² barrier, he says.

Deans says office tenants are becoming a lot more discerning and an increased weighting is being given to criteria such as lifestyle, security and location.

Business Day
 
Publisher: I-Net Bridge
Source: I-Net Bridge