PROPERTY: Century City Second to Cape Town's CBD
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THE Century City office market, which has almost tripled in size to more than 200 000 sq m in the past four years, is now the fourth largest office node in the Western Cape and within a year will move into third position as further new development comes on stream.
Over the next six to 12 months an additional 20 000 sq m of offices will come to the market on a phased basis with more than half of this new space already spoken for in terms of owner occupiers or tenants.
Based on the historical take up of space at Century City in recent years – over 105 000 sq m in the past four years of which 65 800 sq m was taken up in the past 14 months alone — most of these developments are expected to come on stream after existing vacancies have been mopped up, says Greg Deans, a director of developers Rabie Property Group which acquired the remaining undeveloped land at Century City in 2004.
Deans says that ten years after it was launched the Century City development has matured significantly and they were now seeing the emergence of a two tier market with tenants having a much broader choice of product at varying rentals.
“Previously all the available offices were much of a muchness in terms of quality and all largely owner occupied. The precinct was not perceived to be a rental node. Development in recent years has changed that and created a sustainable rental market with a diversity of product and rentals which are varying considerably from a low of around R90 per sq m to around R135 depending on the age, the quality and location of the building within Century City.”
Developments achieving premium rentals include Rabie’s Central Park office park development, which is a low rise office park set around a village green, and where rentals of R135 per sq m are being achieved. This development followed Rabie’s The Forum sectional title office development which was fully let at rentals of between R115 and R120 a sq m six months ago.
Deans says of the 206 000 sq m of offices already built, 26 000 sq m or 13% currently remains to be let.
“While this is currently higher than most other nodes in the Western Cape, it is not surprising given the fact that this is where the bulk of new development has been taking place in recent years as we are in a very enviable position of having our rights in place. Most of the current vacancies are in the 35 000 sq m The Estuaries office park, where we sold land to a variety of developers who have undertaken office developments, half of which have been on a speculative basis. These offices have come to the market at a time of economic uncertainty with many potential tenants adopting a wait and see attitude.”
Deans says since The Estuaries was launched in September 2006 Rabie conscientiously intervened to prevent an oversupply of office space coming on the market and had been undertaking all new developments at Century City to their own account and only selling land to owner occupiers or other developers who had a committed tenant in place.
“As such the bulk of speculative development has already been built and it is only a matter of time before these vacancies are mopped up,” he says.
He points out that the annual take-up of office space at Century City has grown exponentially. “This was a function of not only the upturn in the commercial property market but also Century City’s growing popularity as a commercial destination.”
“The take up for the 12 months to June 2005 was a mere 8 000 sq m, rising to 13 000 sq m in the following 12 months and 18 400 sq m in the year to end June 2006. Since then an astounding 65 800 sq m of space has been taken up,” he says.
Deans says there is no doubt Century City has achieved critical mass and has established itself as a premier office destination in the Western Cape attracting a growing number of blue chip corporate as well as smaller to medium size companies with an estimated 20 000 office workers currently based there.
Century City has development rights for a total of 600 000 sq m of offices so when it is fully developed it will be second only in size to the Cape Town CBD, which has a total of 750 000 sq m of offices.
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