Cape Town office tenants have been urged to act now, in the early stages of a strengthening in the market, to secure long leases on quality space at relatively low base rentals.

With tightening supply in the A-grade sector, rentals are escalating, says Orin Varney, regional leasing manager of Old Mutual Property Group.

He says industry watchers are expecting double-digit rental growth from prime offices in decentralised nodes and the Cape Town CBD for a number of years to come.

“Most asking rentals for A-grade space are around R85/m² to R95/m² and leasing on new developments is already in excess of R100/m².”

Rod Warner, leasing consultant at Old Mutual Property Group, says a recent letting at Safmarine House in the CBD was an example of an office tenant recognising that the time was opportune to secure a good deal.

“The tenant secured a whole floor of 800m² over five years – in contrast to the norm of three-year leases.”

He says that Safmarine House, on the block bounded by Long, Riebeek, Loop and Prestwich Streets, is one of the few buildings in the CBD offering large corporate tenants A-grade space over consecutive floors of 1 100m² each on upper levels.

The 27-storey building, close to shops and the transport hub around the rail station, has a cruciform design which allows more of the popular corner view offices and cuts down deep space, thereby maximising natural light.