Bucking the national slowdown in demand for office space, the Cape Town CBD continues to enjoy momentum as a favoured location for business investment and ongoing property development. Due to the central city’s lifestyle offerings and status as a world-class commercial hub, the need for prime grade commercial premises is set to outgrow presently available stock.
A recent slew of prominent developments began with the completion last year of the state-of-the-art Portside tower block (consisting of triple A-grade floor space plus supporting retail of restaurants and coffee bars); and extends to the brand new, near fully-tenanted 22 Bree Street (accommodating anchor firm Bowman Gilfillan). Bree Street is becoming increasingly popular and, this year, landlords have been receiving frequent requests for restaurant, retail, and office space as businesses seek to take advantage of the greater visitor traffic. The Standard Bank centre on the Foreshore has been upgraded with a new parking level; while the year’s rapid activity extends to nearby Sea Point (mostly along Main and Regent Roads) with the refurbishment of The Point, featuring premium-grade retail and office space as well as the sought-after benefit of secure onsite parking.
The commercial property industry has noted this new norm in market demand – buildings with abundant parking space, energy efficiency, smart office designs maximising floor space and ultra-modern finishes now command the highest rental returns and reflect the lowest vacancies. This means landlords will need to expend a fair amount of capital on maintenance and renewal to keep up with evolving industry standards. If not carried out, a building could quickly be downgraded from A to B grade in the new market, for example.
New trends in office design and use
Many office floors are now designed according to open plan or specialised, activity-based zones, reflecting the latest economic realities such as ICT advancements and shifting demographics. Tenants and investors are attracted to commercial buildings with a human-centric design, elements of which include staff and client comfort (lighting and ambience), relaxation areas, kitchen, shower, and recreation facilities.
This year, the Cape Town CBD has seen an emerging trend called office sharing, which describes consultants, freelancers, students, and entrepreneurs sharing office space and amenities. Especially ideal for start-ups, small and medium-sized businesses, renting space within a larger office – while having access to communal amenities – greatly reduces business expenditure and produces the benefits of highly flexible lease agreements and easy access to external expertise (possibly just metres away). Tenants benefit from the preserved professionalism; while for landlords, the benefit lies in the rental from the increased number of tenants occupying floor space. The Cape Town Central City Improvement District has already projected an increase this year in the buildings fully customisable for office sharing, underlining the CBD’s relevance as a top-notch, modern, and versatile precinct in a leading business city.