Continued demand for commercial office space in Sandton and Rosebank
Despite the slowdown, and the economic uncertainty, there is an on-going demand for commercial office space in suburbs such as Sandton and Rosebank, and the commercial property market has shown definite signs of growth. The trend is to capitalise on the opportunities provided here, such as the competitive rentals, the accessibility to different modes of transport and the benefits of developed infrastructure and location.
The gross domestic product in South Africa expanded 1.20 % in the third quarter of 2012 over the previous quarter as reported by The Statistics South Africa. Historically, from 1993 until 2012, South Africa GDP growth rate averaged 3.2 % reaching a record high of 7.6 % in December of 1994 and a record low of -6.3 % in March of 2009. Finance Minister Pravin Gordham has revised growth projections and will present the budget speech to parliament on 27 February, 2013 at 2 pm.
This is borne out by developers showing confidence in these areas. Investec has a new development on Jellico Avenue in Rosebank. The 10 000 m² office building will have six levels of offices with four levels of basement parking.
Ernst and Young has a new development of about 16,000m² in Rivonia Road, which should be complete by 2014. The company is relocating from Wanderers Office Park. The Alice Lane Development by Abland in Sandton will have more than 32 000 m² of office space, 1 500 m² becoming available on 1 August, 2013.
This shows the planned developments of corporates, which have their own identity and their own buildings. But there is still high quality space and opportunity for the smaller tenants who require between 350 and 2000 square meters. Prestigious buildings in these two strategically important areas are built on green principles, and are within walking distance of the Gautrain.
The SAPOA/PD Office Vacancy report shows that Grade A had reduced vacancies by 7,6% and B buildings had reduced vacancies y 14.5%, while both Grade P and Grade C showed an increase of .5% and 2.2% respectively from quarter 2 2012 to quarter 3 2012.
Total office stock increased by 51,000 m² in quarter 3. Quality office space in A grade buildings is thus available and remains sought after.