Prospects are growing for more high-rise office additions to Cape Town’s CBD skyline, as demand for office space continues to soar.

According to a recent study, the demand for office space in the greater Cape Town area can be expected to grow at 5% annually in real terms. That translates to a demand of 43000m² of CBD office space annually.

Demand can also be expected to grow in line with SA’s overall macro-economic growth, which is expected to be about 5% a year in real terms.

The study of the city’s office and retail sectors was commissioned by Old Mutual Investment Group Property Investments (OMIGPI), which has just concluded the purchase of a vacant CBD site off Buitengracht from the city council for R89,2m.

This, the latest addition to Old Mutual holdings in the CBD, is in line with OMIGPI’s aim to grow its assets under management to R100bn by 2015.

“The study indicates that demand for office space in greater Cape Town can be expected to grow at an annual 107000m² to 2015,” says Brent Wiltshire, who is business development executive for OMIGPI.

“If Cape Town’s CBD maintains its 40% share of the metropolitan office market, demand for office space will be about 43000m² a year, according to the study,” he says.

The study found there are plans for an additional 60000m² of office space in the metro area; of this, 24000m² is in the CBD.

It says that office development typically comes in “lumps”, rather than as an even distribution each year.

“It also says that after two decades of decline, with decentralisation and residential growth creating strong nodes away from the CBD, the work done on improving the inner city has brought a change in fortunes,” Wiltshire says.

“The report says the growth in the office rental market is also good news for retail, as most shoppers in the CBD are people working in the city,” he says.

Business Day