The continuation of very low vacancies is the reason for increasing rentals, as the availability of suitable space in certain nodes does not meet the demand.
There has been a steady reduction in office vacancies since 2003 in response to increased demand for offices. This has been driven by the buoyant economy, combined with very few new office developments and the conversion of certain buildings to residential accommodation.
A grade office vacancies in the CBD have fallen from 12% in 2003 to to 4.9% today.
In the Southern Suburbs area of namely Rondebosch/Newlands the vacancy rate has dropped to 2.9% whereas Claremont has recently increased to 8.3% due to virtually all of this space being in two particular buildings which are newly developed.
3.9% in Bellville and a minimal 1.7% in the sort after V&A Waterfront and with the lowest vacancy coming from that of Pinelands at only 1.3%!
In Century City where almost 100 000m² of new offices came on stream during the past two years, A grade vacancies are at 15.8%.
It is interesting to note that there are still no vacancies in all of hte premier grade offices included in the survey, which perhaps confirms that tenants are willing to pay top rental to get what they want.
The overall combined vacancy in the premier and A grade sector in all seven nodes surveyed is now only 4.9% with 3.9% in B grade.
With the exception of 38 000m² A+ grade becoming available off Eastern Boulevard, the otherwise limited new developments coming on stream should see the office rentals continuing to rise.