PROPERTY: Rental Market In CBD Holds Its Own
Recent Western Cape Business News
According to senior leasing and investment consultant, Ian Grant, of the Eris Property Group, the total vacancy level in the Cape Town CBD is 9.3%. This compares very favourably against the overall vacancy figures for Century City (at 10.2%) or Claremont (14.7%). Bellville has a vacancy of 6.25% because of corporate giants Sanlam and Metropolitan, and likewise Pinelands has a modest 6.8% vacancy rate because of the enduring presence of Old Mutual.
Grant says, “It’s important to view the 9.3% overall vacancy level of the Cape Town CBD in light of the fact that the total office area across all grades in the Central City is three times higher than that of Century City and Pinelands.”
The V&A Waterfront sits at a not-surprising low of 1.4% because of its unique location. However, its office node is still relatively small in comparison to the other nodes.
Grant points out that a more accurate reflection of the individual grades reveals a number of interesting facts about office rentals in the Cape Town Central City.
A-grade property in the Central City was faring well against other nodes. Says Grant: “One must remember that there is materially more A-grade office space in the CBD than in most other areas of Cape Town. Despite this, vacancies across premium space in the CBD are at a very low 1.9%, and remained steady throughout the course of 2010. Compare this to Century City, which had an 18.9% vacancy in premium grade space.”
Grant notes that vacancies in B grade space in the Cape Town Central City are high by comparison to other nodes, at an 11.8% vacancy rate. This represents an opportunity for businesses seeking to be based in the CBD. Bellville, the second biggest node for B grade space, has a vacancy of 8.7%.
Cape Town Partnership CEO Andrew Boraine points out that the phasing in of the IRT public transport network – the MyCiTi bus service between Table View and the CBD is set to start running on Monday 09 May 2011 – will alleviate the necessity to access the Central City by car and will encourage greater footfall into the city. Grant supports this view:
“The CBD is the most easily reached destination for most of the work force from all corners of the Cape Metropole, and this is important for rapidly growing sectors such as the outsourcing/call centre sector. For example, Growthpoint’s 11 Adderley Street is a shining example to all of us in the office sector: they have successfully refurbished an older city property to provide big footplates and top quality space designed for call centre use and subsequently secured key larger tenants such as Teleperformance, providing long-term jobs and investment in the process.”
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