Political and economic changes are par for the course in the complex world we live in – and South Africa has had its fair share of them over the past year.
With the dark days of corruption seemingly coming to an end and a strong push for growth and investment from President Ramaphosa, things are looking positive overall.
There are several trends affecting the commercial property sector that investors should bear in mind as they make their decisions. In this article we’ll take a look at some of the most powerful trends influencing the sector at present.
Changing tenant requirements favour compact offices
As businesses change their cultures and embrace telecommuting, remote working, and a more social and comfortable office environment, the days of cubicles and artificial lighting are numbered.
- With fewer employees at the office on a given day, space requirements are shrinking.
- Depending on what percentage of the company’s employees are opting to work remotely, this could result in a reduction in floor space ranging between 10% and 70% or more.
Building owners will need to plan for a larger number of smaller office units, but not necessarily fewer building users.
Shared office spaces still attract a fair number of users, and they may be concentrated around peak times – this could put pressure on the building’s parking management system and other facilities needed to accommodate them.
Industrial areas are merging with commercial districts
Cape Town’s space constraints mean that industrial and commercial areas are likely to merge in the future. In fact, this trend can already be seen in the eastern CBD and Airport Industria.
Industrial properties have proven to be very resilient over the past few years, despite the political and economic uncertainty of the Zuma era. The demand for industrial properties has encouraged developers to proceed with commercial developments – especially in light industrial areas where bulk retailers and logistics offices are concentrated.
With limited land available for development and an expanding population, merging industrial, commercial and residential areas may be an excellent sustainable solution for Cape Town. This trend is set to create new opportunities to invest in commercial property at a good price.
The Western Cape property market remains buoyant
As the rest of South Africa was going through a property slowdown over the past few years, Cape Town was the notable exception.
- Despite being badly affected by the worst drought in over a century, Cape Town saw the biggest growth in bond registrations in 2016 and 2017.
- This positive trend should endure as the overall economic and political outlook in South Africa continues to improve.
Another major factor still influencing the Cape Town property market is the inflow of foreign investment.
- With investors regaining confidence in SA and global economic conditions remaining good, foreign buyers are investing enthusiastically in the Mother City.
- Foreign entrepreneurs are joining the Digital Cape revolution, the city’s film industry, and the tourism sector, and their confidence in Cape Town is an excellent sign of things to come.
The overall positive trend in the commercial property sector presents a great opportunity for investors – but securing the right property is essential.
To view our portfolio of in-demand office spaces in the Cape Town area, simply contact one of our area specialists today. Our team will work with you to find the ideal property.