So it’s official, serviced offices are in vogue. Together with a rise in demand for furnished offices, serviced offices are emerging as a product paying its way in a new austerity driven market.

Rex Trueform’s iconic building in Salt River is being converted into a sophisticated office park available for lease to office users. The building is well known to Capetonians with its prominent position on Victoria Road at the beginning of Woodstock

Developers and landlords are increasingly looking to add value to their investments by adding additional unique selling points to their property holdings - including a growing trend to provide fully furnished offices

Security-focused office parks are set to become increasingly popular – and will generally command higher office rentals and have lower vacancy rates than standalone office blocks, or office parks with a more half-hearted focus on security.

According to Org Geldenhuys, managing director of property development and management company, Abacus DIVISIONS, "access-controlled office parks is where the money is"

As confidence wavers in the ability of financial institutions to provide an adequate haven for the investment capital of average South Africans, so the need to find strong viable alternatives for one’s savings becomes more urgent. And it might not be the most obvious forms of conventional investment where opportunity lies:

All 18 office suites in a sectional title office block at Century City have been sold ahead of the building completion. The 2 200 square metre building in question is part of the 18 000 square metre Central Park low rise office park.

Sedica Knight of the developers, Rabie Property Group, said the office suites range from just over 60 square metres to just over 220 square metres with purchasers being fairly evenly split between owner occupiers and investors

A prominent and well positioned site on the corner of Summerley and Main Roads in Kenilworth, Cape Town, is being redeveloped into a prime AAA grade commercial property which is expected to act as a catalyst for urban renewal in the area. Owned and developed by the Pam Golding Property group ‘Pam Golding on Main’ will comprise 4100sqm of offices and retail space, as well as 129 parking bays on two floors of secure, undercover parking. 

According to a recent report by Jones Lang LaSalle (JLL), focusing on Johannesburg, the commercial market is “beginning to favour landlords in the prime office accommodation as they are beginning to achieve asking gross rentals and reduced vacancies albeit limited speculative completions”.

The graph below shows the ratio of unlet new office space to total new space. The general trend has been one reflecting a lowering ratio, however in the case of Durban and Johannesburg, the ratio has increased. In Durban's case it is more a function of new space being absorbed into the mainstream market, whereas in Joburg's case the amount of new space on the market (just over 358,000m²) has increased to its highest level since Q3 2009. With the ratio of unlet new space at just under 60% - whilst not that high by historical perspective - could still negatively impinge on the overall vacancy rate going forward.

According to JLL nevertheless, investors are still conservative in committing to new speculative developments due to uncertainty, suggesting that speculative developments represent about 36% of the pipeline in the next 2 years. With all the committed construction activity in the Johannesburg area, office stock is expected to reach over 8,6 million m² in 2012 and 8.8 million m² in 2013.

JLL indicates that Sandton and Bryanston continue to be nodes of choice for office accommodation where heightened activity was noted during Q1 2012. Large deals in the market during in this period are the take up of over 16,000m² by the law firm CLA Cliff Dekker in Sandton and the 3,000m² office lease by Huawei Technologies SA in Bryanston.

The commercial market in Johannesburg is beginning to favour landlords in the prime office accommodation as they are beginning to achieve asking gross rentals and reduced vacancies albeit limited speculative completions

A commercial property comprising an industrial warehouse and offices in the Village Main in the Johannesburg South, will be amongst the quality lots on offer during this month’s Commercial Multiple auction event being held at the Hilton Hotel on September 28