CCID STATS
THE STATE OF CAPE TOWN CENTRAL CITY REPORT 2016 DOING BUSINESS IN THE CENTRAL CITY
COMMERCIAL PROPERTY TRENDS
Commercial property in the Cape Town CBD continues to grow overall from strength-tostrength against the previous year under review.
The Cape Town CBD is the only major inner-city area in South Africa bucking the trend of office vacancies remaining high. While national inner-city office vacancies year on year were up 40bps to 15.5 %, the Cape Town CBD’ s vacancies have continued to drop, the latest year on year from 10 % to 9.4 %.
Although slightly higher than at the end of 2015, the City of Cape Town overall continues to have the lowest office vacancy rate 1 of all South African municipalities( as at Q3 2016), at 7.6 %. Focusing on the Cape Town Central City, the fourth quarter of 2016 saw vacancies sit at 9.4 % overall, down from 10 % in December 2015. The most significant drop in vacancy rates in the CBD has been in premium( P) grade, which has declined significantly year on year from 25 % in 2015 to 13.8 % in 2016. There have also been notable drops in A grade( from 9.1 % to 6.7 %) and C grade( from 16.4 % to 11.9 %), the latter due in no small part to the conversion of C grade space into residential and hotel accommodation over the course of the last 18 months – a trend set to continue into 2017. The only category in which vacancies rose was B grade, which showed yearon-year movement from 7.3 % to 10.3 %.
“ It would appear that much of the world’ s economy, including South Africa, has taken on a holding pattern and this is further portrayed in the country’ s GDP growth figures. However, Cape Town seems to have escaped the downturn and construction activity here continues to boost the local economy. We continue to see high levels of activity in and around the Cape Town CBD, the V & A Waterfront as well as the Atlantic Seaboard. These activities certainly indicate the level of confidence that investors still have in the future of our city.”
JOHN MATTHEWS, president of the Master Builders Association of the Western Cape( MBAWC), www. netwerk24. com, 11 October 2016
SUMMARY OF RENTAL OFFICE SPACE IN THE CBD( as at Q4 2016)
GRADE
Total rentable area( m 2)
Available for leasing |
Vacancy rate(%) |
Average gross asking |
|
|
rentals( R / m 2) |
|
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
Premium |
52 000 |
52 000 |
13 000 |
7 200 |
25 % |
13.8 % |
185 |
185 |
A grade |
349 883 |
361 883 |
31 819 |
24 310 |
9.1 % |
6.7 % |
130 |
133 |
B grade |
501 612 |
509 362 |
36 865 |
52 555 |
7.3 % |
10.3 % |
95 |
105 |
C grade |
133 317 |
106 363 |
21 808 |
12 679 |
16.4 % |
11.9 % |
75 |
75 |
TOTALS |
1 036 812 |
1 029 608 |
103 492 |
96 744 |
10.0 % |
9.4 % |
|
|
COMPARATIVE OFFICE RENTAL RATES 2012 TO 2016 COMPARATIVE OFFICE VACANCY RATES 2012 TO 2016
SOURCES: Western Cape construction activity continues despite economic conditions, Cape Business News; 8 September 2016
200 180 160 140 120 100 80 60 40 20 0
Rentals March 2012 to December 2016 Vacancies March 2012 to December 2016
Mar 2012 June 2012
Sept 2012
Dec 2012 Mar 2013
June 2013
Sept 2013 Dec 2013
Mar 2014 June 2014
Sept 2014 Dec 2014
Mar 2015 June 2015
Sept 2015 Dec 2015
Mar 2016 June 2016
Sept 2016 Dec 2016
P GRADE A GRADE B GRADE C GRADE P GRADE A GRADE B GRADE C GRADE
1 All information on this page is as per the SAPOA quarterly reports, www. sapoa. org. za
40 35 30 25 20 15 10 5 0
Mar 2012 June 2012
Sept 2012
Dec 2012 Mar 2013
June 2013
Sept 2013 Dec 2013
Mar 2014 June 2014
Sept 2014 Dec 2014
Mar 2015 June 2015
Sept 2015 Dec 2015
Mar 2016 June 2016
Sept 2016 Dec 2016
13