While the office park industry is still trying to claw its way to a better performance level. there are still “pockets of health” where the market is reinvigorating itself, and showing some stalwart results, said Org Geldenhuys, managing director of property development and management company, Abacus DIVISIONS.
“Secure office parks, such as Route 21 Corporate Park in Irene, continue to buck the trends. Elements that tenants and buyers are looking at include security, proximity to main roads, and access to technology such as fibre optics. This is where we are seeing growth – and will continue to do so.”
Meanwhile in the fourth quarter of 2013 Menlyn showed an 12% increase in rentals, while Pretoria Century City hit 10%, and the Sandton CBD – overall – showed an improvement of 8 %, as nominal rentals were able to beat building-cost inflation (+ 6%)
According to Rode & Associates, CEO Erwin Rode, noted that rental growth in Sandton might not be sustained due to to the node’s high vacancy rate: 14 % for grade A+, A and B combined – and the huge amount of additional office space said to be in the pipeline.
“Besides being the country’s financial hub, another explanation for Sandton’s popularity among developers is its Gautrain station,” Rode commented.
Commenting further, Geldenhuys said the recently-launched boutique office park, Quattro Fontane – in Irene – is ready for building to commence. “We sold the stands within three months, with the first tenants due to move in during the first quarter of next year.
“Here we are seeing 11 000 square metres being utilized, with a total investment – when completed – of R130 million. “
Rode further noted that Cape Town and Pretoria decentralised recorded growth of 4 percent while in Johannesburg decentralized rentals were up by about 3 percent.
As for industrial rentals, the growth in Durban has really been heating up – so much that, in recent quarters, this city has been showing the strongest growth amongst the major industrial regions, said Rode.
Geldenhuys said there is also a “significant demand” for industrial space in the Greater Irene area, Pretoria.
“People are almost standing in queue,” he quipped.