research office vacancy report - sapoa.org.za · t 011 883 0679 011 883 0684...

RESEARCHOffice Vacancy Report

T: (011) 883 0679 F: (011) 883 0684Email: [email protected]: www.sapoa.org.za

Q5 Office Vacancy Report April 2017

CONTRIBUTORS

2



KEY FINDINGSAs at Q1 2017, the national office vacancy rate as recorded by SAPOA was 11.1% - up 40bps on the quarter before. In square meters terms, an aggregate of 32k sqm was occupied during the past quarter while 111k sqm of stock was added to the survey sample - the result: a negative net absorption of around 78k sqm

Asking rental growth has slowed significantly on a year over year basis – indicative of the current low growth environment coupled with an excess supply in the market.

A significant factor driving the excess demand currently prevalent in the market is the amount of space ‘left behind’ by large corporates consolidating their real estate operations. This backfill risk has already contributed to increased vacancy rate in certain nodes with the potential for more as several large development projects come on line in the short term.

The sideways trend in the overall vacancy rate remains firmly in tact following Quarter 1’s 38bp uptick. While there has been a couple of quarters of promising uptake of space, this has often been followed by periods of deterioration which has offset the gains. The three quarters ended March 2017 has seen a net 127k sqm leakage of space after a 68k sqm net absorption in Q2 2016.

The latest quarter saw a 80bp improvement in the vacancy rate of Prime offices from 4.0% to 3.2% while the A, B & C grade office segments recorded declines in occupancy rate. The vacancy rate of A & B-grade offices increased by 50bps each while C-grade offices increased by 30bps to end the quarter at 16.7%.

On a municipal level, the lowest office vacancy rate at quarter end was recorded for the City of Cape Town with 7.5%. While the City of Cape town’s office occupancy rate as a whole was only down 10bps on the quarter before, 5 of 7 nodes actually recorded improved occupancy rates.

The highest vacancy rate among the larger metros was the 12.3% recorded for both the City of Joburg and Ethekwini Municipality. Both of these node’s vacancy rate is driven by their inner cities with vacancy rates of 20.2% and 17.6% respectively.

The office sector recovery is becoming increasingly fragile. While the aggregate vacancy rate is still moving broadly sideways, signs of weakness are becoming apparent, especially the recent slowing in asking rental growth which was negative in inflation-adjusted terms at quarter end.

Capital investment into financial & business services remain negative for the quarter to March 2017 bringing into doubt the strength of the current recovery and raises the probability of another upward leg in the vacancy rate trend.

Any future improvement in vacancy rate and asking renal growth depends on a strengthening of underlying demand drivers most notably financial & business services employment growth & capital investment. Given the recent credit ratings downgrade and potential impacts thereof it is hard to imagine the national office vacancy rate returning to mid-single digits within the next 24 months. That said, leasing opportunities do exist – evident in the fact that 23 of 53 nodes reported improving occupancy rates over the past quarter and 22 nodes currently have vacancy rates of sub-8%.

3



HEADLINE RESULTS & DRIVERSVACANCY RATE UP 20BPS Q/QAs at Q1 2017, the national office vacancy rate as recorded by SAPOA was 11.1% - up 40bps on the quarter before. In square meters terms, an aggregate of 32k sqm was occupied during the past quarter while 111k sqm of stock was added to the survey sample - the result: a negative net absorption of around 78k sqm.

Asking rental growth has slowed significantly on a year over year basis – indicative of the current low growth environment coupled with an excess supply in the market. Asking rental growth slowed to 3.1% year on year which is the lowest level in 9 quarters and at a similar level to the 2002 vacancy peak.

A significant factor driving the excess demand currently prevalent in the market is the amount of space ‘left behind’ by large corporates consolidating their real estate operations. This backfill risk has already contributed to increased vacancy rate in certain nodes with the potential for more as several large development projects come on line in the short term. Rosebank is among the first nodes where backfill risk has played out with a 6.9% aggregate vacancy rate increase on the back of Sasol vacating several buildings in the node as they move into their new Sandton head office.

4



HEADLINE RESULTS & DRIVERSSIDEWAYS TREND REMAIN IN TACTThe sideways trend in the overall vacancy rate remains firmly in tact following Quarter 1’s 38bp uptick. While there has been a couple of quarters of promising uptake of space, this has often been followed by periods of deterioration which has offset the gains. The three quarters ended March 2017 has seen a net 127k sqm leakage of space after a 68k sqm net absorption in Q2 2016.

The cumulative impact on actual square meters of vacant space has been significant. Since mid-2008, a net total of 1.3 million sqm has been vacated underlining the lack of growth drivers of office demand which has seen it outstripped by supply.

The second quarters of 2015 & 2016 saw promising improvements of 60 & 40bps respectively - the largest quarter-on-quarter declines since 2008- but even then there still wasn’t a clear downward trend with more than half of office nodes surveyed reporting deteriorating vacancy rates compared to the quarter before in either of those periods.

5



HEADLINE RESULTS & DRIVERSLACK OF MACROECONOMIC GROWTH DRIVERSRecent data suggests that the fundamentals underlying the office sector recovery remain fragile with the latest economic growth and employment data pointing to a stagnant, flat growth environment while Business & Financial services capital investment (a key leading indicator for office occupancy) remains negative at -1.6% year on year. This raises the probability that office vacancy rates could deteriorate further before improving. (next graphic demonstrates the historical relationship between capital investment and office vacancy rates).

Business confidence remains negative at 40 points- implying an overall negative sentiment among business executives which is likely to see industry decision makers maintaining an increasingly selective approach to capital allocation – especially expansionary. The next release of this figure will be post the latest credit ratings downgrade which could also have a negative impact on office sector expansion given the prospect of higher interest rates and lower economic growth.

A sustained improvement in the office vacancy rate relies on a strengthening of these macroeconomic drivers so in summary, the office sector still faces a range of headwinds not least of which is economic growth and job creation.

6



HEADLINE RESULTS & DRIVERSGROWTH IN CAPITAL FORMATION NEGATIVEHistory suggests the currently negative financial & business capital investment poses a risk to office occupancy rates 2-3 years down the road & by consequence rental growth & investment returns. The graphic below illustrates the relationship between business capital investment and the office vacancy rate.

Going back to 1990, capital investment has led the office vacancy cycle by 10-14 quarters. The volatile trend in the Business & financial services capital investment measure since 2013 coupled with the most recent slump could mean that vacancy rates could deteriorate further before getting better.

The previous economic cycle saw a strong recovery in capital investment (period ’04-’07) – driven by robust GDP growth while the current GDP growth forecast suggests at best a more moderate upturn in economic growth. The recent ratings downgrade could further hamper meaningful capital formation making the base case scenario a more protracted, bumpier office vacancy recovery this cycle relative to the 2004-2008 cycle.

7



OFFICE VACANCY & RENTAL GROWTHBY GRADEThe latest quarter saw a 80bp improvement in the vacancy rate of Prime offices from 4.0% to 3.2% while the A, B & C grade office segments recorded declines in occupancy rate. The vacancy rate of A & B-grade offices increased by 50bps each while C-grade offices increased by 30bps to end the quarter at 16.7%.

The latest vacancy rate for all grades is still at or below the 2013/14 peak so it will be interesting to see if the weakening macroeconomic environment pushes it past that level and perhaps closer to 2003 levels.

The most recent quarter saw 30 of 53 office nodes record weakening office vacancy rates while 23 nodes saw improving occupancy. This underlines the importance of nodal selection for property fund and asset managers in the current market with location playing a similarly important role as office quality and other characteristics such as floorplate size & configuration, parking & accessibility.

8



OFFICE VACANCY & RENTAL GROWTHBY REGIONOn a municipal level, the lowest office vacancy rate at quarter end was recorded for the City of Cape Town with 7.5%. While the City of Cape town’s office occupancy rate as a whole was only down 10bps on the quarter before, 5 of 7 nodes actually recorded improved occupancy rates.

The highest vacancy rate among the larger metros was the 12.3% recorded for both the City of Joburg and Ethekwini Municipality. Both of these node’s vacancy rate is driven by their inner cities with vacancy rates of 20.2% and 17.6% respectively.

The City of Tshwane and Nelson Mandela Bay metros recorded 9.9% and 9.8% respectively. Tshwane’s aggregate vacancy rate was up 70bps on the quarter prior with the bulk of the change driven by Highveld Technopark and the Menlyn and Brooklyn areas.

The Nelson Mandela Bay municipality saw the largest improvement over the course of the quarter with a move of -220bps – driven by an encouraging 14.5% decline in the (relatively small) Newton Park node.

9



OFFICE VACANCY & RENTAL GROWTHBY LOCATION – CBD VS. DECENTRALISEDInner city office vacancy rates remain high and at 1.7x the level of city decentralised nodes – a similar situation as the previous two cycles when vacancies were nearing peak levels. In saying that, inner city vacancies are currently lower than it was in 2003 as a result of structural change brought about by the conversion of CBD offices to residential space.

During the quarter ending March 2017, the national inner city office vacancy rate was up 50bps to 15.9% while the country’s city decentralized nodes posted an aggregate vacancy rate of 9.5% - 30bps up from the previous quarter (not withstanding fluctuations in the underlying nodes).

The current level of inner city office vacancies is largely driven by the CBD of Johannesburg where the aggregate vacancy rate ended the quarter at 20.2%. The Cape Town CBD recorded the largest increase in vacancy rates with a quarter on quarter move of +2.1% to end at 11.5%.

While the overall City Decentralised segment saw minimal movement quarter on quarter, the V&A Waterfront, Century City and Greenstone nodes among others all saw positive moves with regard to occupancy rates.

10



WHICH NODES DROVE THE CHANGE IN VACANCY?On a nodal level, there is significant variance – both in terms of absolute vacancy rate and the direction of their recent trends up or down. The graphic below illustrates the top 5 nodes in terms of positive & negative impact on the overall vacancy rate.

During the quarter ending March 2017, the Century City office node had the largest positive impact by recording an improvement of 4.5% thereby contributing around 10bps to the overall decline. Other notable contributors to the overall improvement was Sandton, Umhlanga & the Durban CBD.

Bryanston, Rosebank & the Cape Town CBD had the largest negative impact on the overall office vacancy rate contributing a combined -40bps to the shift in the national figure. All other nodes had a combined contribution of ~10bps to the overall decline in vacancy rate.

11



OFFICE DEVELOPMENT ACTIVITYSeveral large office developments came onto the market during the course of 2016 which saw the aggregate development number come off slightly. Another reason for the decline is that some development schemes are scaling down speculative building activity and opting to only phase development on a tenant driven basis.

At the end of the current quarter, developments under construction totalled 672k sqm (down from the Q4 2015 peak of 982k sqm). Expressed as a percentage of existing market stock, development activity is currently at 3.8% -off the 6%+ high of 2007-’08 but still on the high side given the absence of growth drivers on a national level.

The overall pre-let rate of developments has been trending down since 2015 but remains above the 65% mark. As at the end of the current quarter, the national pre-let rate of developments where ground has been broken was recorded at 65.7%. With many new projects being tenant driven, it is likely that the pre-let rate will further increase at an aggregate level.

12



OFFICE DEVELOPMENT ACTIVITYDevelopment activity continues to be concentrated with 90% of office development taking place in 10 nodes with Gauteng office nodes dominating the rankings table. Sandton continues to account for the bulk of development activity and as at quarter end constitutes 51% of national office development.

The 20 largest projects account for ~84% of total office development GLA in the metros & nodes currently covered by the survey. With many of these projects slated for completion in the next 12-18 months and fewer projects breaking new ground at present it is possible that development activity contracts in 2018 through 2019.

The rapidly growing greenfield development nodes of Waterfall and Highveld Technopark as well as the more mature Rosebank node round out the top 4 with several large scale developments in progress. On a regional level, Gauteng accounts for more than 94% of current office developments by GLA in the nodes forming part of the SAPOA OVS.

13



WHICH NODES COULD COME UNDER PRESSURE?Given the level of development activity that remains high relative to the historical trend it’s important to form a view of demand alongside the supply picture. While some nodes may have a high level of development relative to others - these might be mostly pre-let which would not impact as negatively on rentals.

The graphic below breaks down the top & bottom 5 nodes based on their current total vacancy rate and level of development activity to establish an indicator of short to medium term pressure on rental growth.

As an example, the fast growing Waterfall node is currently deemed to be higher on the pressure index than the Sandton node based on these measures. This factor will change over time (especially in the case of large, multi-year projects) as more development space is completed and a higher proportion is pre-let before it comes onto market. On the other hand, nodes exposed to backfill risk will move up the Pressure Index as large corporate HQs come online.

On a national level, the pressure index is currently at .32 – down from a recent high in 2013 of .69 but far off the lows of .06 experienced before the recession of 2009. On the other side of the pressure spectrum are mature, popular nodes such as Pinelands, Bellville and Rondebosch/Newlands which have limited opportunities for greenfield developments which should underpin short term rental growth.

14



WHICH NODES COULD COME UNDER PRESSURE?Further analysis of the total vacancy rate on a nodal level reveals that several nodes currently have a fairly wide spread between their ‘total’ vacancy rate (incl. un-let developments) and the vacancy rate on completed/existing property. Speculative developments pose a downside risk to rental growth if unlet and a failure to do so might see the node’s vacancy rate converge on the current ‘total vacancy rate’.

In the case of Waterfall, unlet new developments currently hold a potential downside risk of 7.2% impact on vacancy rate as the vacancy rate of completed property is 5.6% but including unlet developments in this figure ups it to around 12.9%.

Rosebank is another node where unlet new developments pose a risk to shirt to medium term rental growth. The node has already come under pressure as Sasol has vacated several buildings in the node to move into its new head office in Sandton.

15



WHERE ARE WE IN THE OFFICE PROPERTY CYCLE?broadly sideways, signs of weakness are becoming apparent, especially the recent slowing in asking rental

into doubt the strength of the current recovery and raises the probability of another upward leg in the vacancy rate trend. As far as development activity & the total vacancy rate (incl. new developments) are concerned, the

should be towards the ‘north west’ on the graphic below– a situation where demand exceeds a healthy level of supply.

Any future improvement in vacancy rate and asking renal growth depends on a strengthening of underlying

vacancy rate returning to mid-single digits within the next 24 months.

That said, leasing opportunities do exist – evident in the fact that 23 of 53 nodes reported improving occupancy rates over the past quarter and 22 nodes currently have vacancy rates of sub-8%.

16


CITY OF JOHANNESBURGBedfordviewA 156 434 12 444 8,0% 3,2% 2,3% 2,2% 95 130 106 B 55 517 4 965 8,9% 10,6% 13,8% 14,3% 100 110 100 C 16 378 5 177 31,6% 24,9% 30,9% 34,8% 85 95 85 Total 228 329 22 586 9,9% 7,0% 7,3% 7,7% 12 550 - BraamfonteinA 209 821 12 419 5,9% 5,8% 6,8% 6,8% 85 90 87 B 142 838 15 581 10,9% 10,0% 9,9% 10,3% 70 85 80 C 98 516 2 121 2,2% 2,7% 2,7% 2,7% 80 80 80 Total 451 175 30 121 6,7% 6,4% 6,9% 7,0% 28 000 - BrumaA 70 083 4 892 7,0% 12,9% 6,4% 11,6% 84 95 90 B 33 322 7 991 24,0% 24,2% 23,2% 11,2% 75 110 87 C 2 460 209 8,5% 8,5% 8,5% 76,2% 75 75 75 Total 105 865 13 092 12,4% 16,3% 13,0% 13,2% - - Bryanston/Epsom DownsP 14 011 400 2,9% 5,5% 5,5% 5,5% 155 155 155 A 285 160 39 428 13,8% 7,5% 7,0% 6,2% 115 195 140 B 287 598 28 672 10,0% 9,9% 10,6% 10,4% 90 152 zC 11 806 2 930 24,8% 16,6% 16,6% 16,6% 90 95 90 Total 598 575 71 431 11,9% 8,7% 8,9% 8,4% 10 756 8 556 192 CBD JOHANNESBURGA 558 173 18 358 3,3% 3,3% 3,3% 5,0% 110 110 110 B 981 994 253 564 25,8% 25,8% 25,9% 23,8% 54 100 80 C 381 091 115 773 30,4% 30,2% 30,2% 34,6% 25 80 60 Total 1 921 258 387 695 20,2% 20,1% 20,2% 20,6% - - Constantia KloofA 312 501 16 733 5,4% 4,7% 3,9% 4,7% 90 135 120 B 21 743 260 1,2% 3,9% 10,3% 11,9% 75 75 75 Total 334 244 16 993 5,1% 4,7% 4,3% 5,1% - - Cresta/Blackheath/RandparkP 75 000 - 0,0% 0,0% 0,0% 0,0% - - A 54 110 6 926 12,8% 17,9% 19,4% 18,5% 95 130 108 B 42 035 2 962 7,0% 12,4% 12,7% 17,3% 75 110 80 Total 171 145 9 888 5,8% 8,7% 9,3% 10,1% - - FourwaysP 25 000 - 0,0% 0,0% 0,0% 0,0% - - A 182 467 21 151 11,6% 9,9% 11,3% 10,5% 95 195 117 B 9 665 - 0,0% 1,4% 1,4% 1,4% - - Total 217 132 21 151 9,7% 8,3% 9,5% 8,8% 1 760 1 560 152 GreenstoneP 16 400 - 0,0% 0,0% 0,0% 0,0% - - A 54 214 3 609 6,7% 10,8% 11,2% 10,9% 110 152 150 Total 70 614 3 609 5,1% 8,5% 8,8% 8,5% - - Houghton/KillarneyA 122 284 12 275 10,0% 10,6% 10,6% 10,0% 105 175 140 B 2 200 - 0,0% 0,0% - - Total 124 484 12 275 9,9% 10,4% 10,6% 10,0% 2 538 2 538 185 Hyde Park/DunkeldA 40 867 788 1,9% 4,8% 7,2% 12,4% 140 140 140 B 74 533 5 201 7,0% 5,0% 4,8% 4,1% 111 170 130 Total 115 400 5 989 5,2% 4,9% 5,6% 7,1% - - IllovoP 22 600 - 0,0% 0,0% 0,9% 10,2% - - A 172 452 23 249 13,5% 12,4% 11,4% 16,4% 125 200 160 B 27 164 2 259 8,3% 6,9% 7,8% 6,0% 105 165 155 Total 222 216 25 508 11,5% 10,4% 9,9% 14,5% - - Melrose/WaverleyP 116 000 5 939 5,1% 0,2% 0,4% 1,6% 165 165 165 A 44 799 5 717 12,8% 1,3% 2,8% 2,8% 149 171 166 B 16 697 - 0,0% 0,0% 0,0% 0,0% - - C 3 500 360 10,3% 0,0% 9,8% 5,3% 90 90 90 Total 180 996 12 016 6,6% 0,5% 1,1% 1,8% 6 000 1 800 185 MidrandP 8 000 - 0,0% 0,0% 0,0% - - A 409 608 50 223 12,3% 14,1% 12,2% 7,0% 75 165 100 B 190 317 23 452 12,3% 11,8% 11,8% 8,9% 65 142 80 C 18 785 10 218 54,4% 43,3% 52,6% 52,1% 70 85 85 Total 626 710 83 893 13,4% 14,1% 13,3% 8,8% 24 500 14 500 173 MilparkA 27 900 - 0,0% 0,0% 0,0% 0,0% - - B 178 926 17 237 9,6% 8,9% 7,1% 8,7% 80 105 85 C 18 346 1 520 8,3% 19,4% 23,7% 23,7% 90 90 90 Total 225 172 18 757 8,3% 8,6% 7,5% 8,8% - -

3% 6% 9% MIN MAX MEDCITY OF JOHANNESBURGBedfordviewA 156 434 12 444 8,0% 3,2% 2,3% 2,2% 95 130 106 B 55 517 4 965 8,9% 10,6% 13,8% 14,3% 100 110 100 C 16 378 5 177 31,6% 24,9% 30,9% 34,8% 85 95 85 Total 228 329 22 586 9,9% 7,0% 7,3% 7,7% 12 550 - BraamfonteinA 209 821 12 419 5,9% 5,8% 6,8% 6,8% 85 90 87 B 142 838 15 581 10,9% 10,0% 9,9% 10,3% 70 85 80 C 98 516 2 121 2,2% 2,7% 2,7% 2,7% 80 80 80 Total 451 175 30 121 6,7% 6,4% 6,9% 7,0% 28 000 - BrumaA 70 083 4 892 7,0% 12,9% 6,4% 11,6% 84 95 90 B 33 322 7 991 24,0% 24,2% 23,2% 11,2% 75 110 87 C 2 460 209 8,5% 8,5% 8,5% 76,2% 75 75 75 Total 105 865 13 092 12,4% 16,3% 13,0% 13,2% - - Bryanston/Epsom DownsP 14 011 400 2,9% 5,5% 5,5% 5,5% 155 155 155 A 285 160 39 428 13,8% 7,5% 7,0% 6,2% 115 195 140 B 287 598 28 672 10,0% 9,9% 10,6% 10,4% 90 152 115 C 11 806 2 930 24,8% 16,6% 16,6% 16,6% 90 95 90 Total 598 575 71 431 11,9% 8,7% 8,9% 8,4% 10 756 8 556 192 CBD JOHANNESBURGA 558 173 18 358 3,3% 3,3% 3,3% 5,0% 110 110 110 B 981 994 253 564 25,8% 25,8% 25,9% 23,8% 54 100 80 C 381 091 115 773 30,4% 30,2% 30,2% 34,6% 25 80 60 Total 1 921 258 387 695 20,2% 20,1% 20,2% 20,6% - - Constantia KloofA 312 501 16 733 5,4% 4,7% 3,9% 4,7% 90 135 120 B 21 743 260 1,2% 3,9% 10,3% 11,9% 75 75 75 Total 334 244 16 993 5,1% 4,7% 4,3% 5,1% - - Cresta/Blackheath/RandparkP 75 000 - 0,0% 0,0% 0,0% 0,0% - - A 54 110 6 926 12,8% 17,9% 19,4% 18,5% 95 130 108 B 42 035 2 962 7,0% 12,4% 12,7% 17,3% 75 110 80 Total 171 145 9 888 5,8% 8,7% 9,3% 10,1% - - FourwaysP 25 000 - 0,0% 0,0% 0,0% 0,0% - - A 182 467 21 151 11,6% 9,9% 11,3% 10,5% 95 195 117 B 9 665 - 0,0% 1,4% 1,4% 1,4% - - Total 217 132 21 151 9,7% 8,3% 9,5% 8,8% 1 760 1 560 152 GreenstoneP 16 400 - 0,0% 0,0% 0,0% 0,0% - - A 54 214 3 609 6,7% 10,8% 11,2% 10,9% 110 152 150 Total 70 614 3 609 5,1% 8,5% 8,8% 8,5% - - Houghton/KillarneyA 122 284 12 275 10,0% 10,6% 10,6% 10,0% 105 175 140 B 2 200 - 0,0% 0,0% - - Total 124 484 12 275 9,9% 10,4% 10,6% 10,0% 2 538 2 538 185 Hyde Park/Dunkeld

Total Rentable Area (m2)

Area Available for leasing

(m2)Gross Asking

RentTotal Rentable

Area (m2)


(m2)Vacancy Rate

(%)

Previous Months Gross Asking Rentals (R/m2)DataTables

17





(m2)Gross Asking

RentTotal Rentable

Area (m2)


(m2)Vacancy Rate

(%)

Previous Months Gross Asking Rentals (R/m2)DataTablesMorningsideA 70 169 15 423 22,0% 23,3% 26,9% 21,8% 100 130 115 B 16 364 3 304 20,2% 23,3% 3,4% 0,0% 90 140 115 Total 86 533 18 727 21,6% 23,3% 22,9% 17,7% - - NewtownP 30 000 - 0,0% 0,0% 0,0% 0,0% - - A 61 859 2 100 3,4% 3,4% 3,4% 3,4% - - B 77 700 23 256 29,9% 29,9% 29,9% 29,9% 85 95 95 C 6 300 - 0,0% 0,0% 0,0% 0,0% - - Total 175 859 25 356 14,4% 14,4% 14,4% 14,4% - - ParktownA 125 246 10 600 8,5% 6,7% 2,5% 2,4% 95 145 116 B 214 180 20 456 9,6% 12,7% 12,5% 8,5% 85 110 102 C 19 220 8 604 44,8% 44,8% 2,1% 2,1% 95 95 95 Total 358 646 39 660 11,1% 12,3% 8,7% 6,2% 6 680 3 600 155 RandburgP 32 000 - 0,0% 0,0% 0,0% 0,0% - - A 75 349 4 450 5,9% 5,9% 11,0% 1,0% 85 110 85 B 327 190 55 539 17,0% 15,6% 14,1% 11,0% 63 120 75 C 22 400 2 616 11,7% 23,9% 25,7% 20,9% 50 65 60 Total 456 939 62 605 13,7% 13,3% 13,3% 9,5% - - RivoniaA 10 500 884 8,4% 9,4% 3,5% 3,5% 145 145 145 B 265 182 41 223 15,5% 15,7% 14,1% 17,1% 45 200 95 C 5 834 70 1,2% 1,2% 0,3% 0,0% - - Total 281 516 42 177 15,0% 15,1% 13,4% 16,2% - - RosebankP 67 000 - 0,0% 0,0% 0,0% 0,0% - - A 160 501 25 065 15,6% 9,1% 7,6% 6,3% 120 275 147 B 158 823 26 864 16,9% 5,5% 7,9% 10,4% 95 200 125 C 13 582 65 0,5% 0,5% 0,5% 1,2% 115 115 115 Total 399 906 51 994 13,0% 5,8% 6,1% 6,8% 48 773 34 037 SandtonP 565 571 20 266 3,6% 4,1% 4,1% 5,1% 160 199 189 A 792 912 105 275 13,3% 14,6% 14,2% 15,8% 95 205 145 B 203 860 15 971 7,8% 7,7% 7,1% 7,1% 90 175 112 Total 1 562 343 141 512 9,1% 9,9% 9,6% 10,7% 346 000 57 500 245 SunninghillA 177 851 18 601 10,5% 9,8% 9,8% 10,8% 75 118 87 B 180 059 7 856 4,4% 4,4% 4,4% 0,0% 75 90 80 Total 357 910 26 457 7,4% 7,0% 7,0% 6,9% - - WaterfallP 30 339 - 0,0% 0,0% 0,0% 0,0% - - A 52 435 4 667 8,9% 2,9% 8,6% 13,2% 171 171 171 Total 82 774 4 667 5,6% 1,8% 5,4% 9,1% 58 511 13 511 210 WoodmeadA 312 186 24 780 7,9% 7,9% 7,9% 7,9% 90 135 120 B 95 230 31 129 32,7% 32,7% 32,7% 48,0% 75 130 93 Total 407 416 55 909 13,7% 13,7% 13,7% 13,7% - - CITY OF CAPE TOWNBellvilleP 10 600 4 145 39,1% 50,6% 178 178 178 A 369 797 6 144 1,7% 1,5% 2,3% 2,6% 105 150 120 B 161 441 13 329 8,3% 8,7% 7,6% 8,5% 86 120 98 C 21 618 4 999 23,1% 23,1% 22,4% 21,6% 45 70 61 Total 563 456 28 617 5,1% 5,3% 4,6% 5,1% - - ClaremontP 6 000 508 8,5% 8,5% 255 255 255 A 62 636 1 535 2,5% 3,1% 5,1% 7,5% 185 236 185 B 48 086 3 846 8,0% 7,6% 6,4% 3,0% 120 160 130 C 9 679 1 615 16,7% 12,7% 13,6% 15,5% 45 105 75 Total 126 401 7 504 5,9% 5,8% 6,3% 6,4% - - CBD CAPE TOWNP 52 000 7 200 13,8% 13,8% 19,2% 19,6% 185 185 185 A 361 883 30 885 8,5% 6,7% 8,9% 9,5% 100 165 140 B 522 710 60 553 11,6% 10,3% 9,4% 9,7% 80 170 110 C 119 360 23 018 19,3% 11,9% 12,6% 11,1% 50 150 88 Total 1 055 953 121 656 11,5% 9,4% 10,1% 10,3% 23 000 14 000 Rondebosch/NewlandsA 71 654 2 365 3,3% 5,2% 4,1% 4,5% 160 175 168 B 28 077 2 296 8,2% 11,5% 0,0% 4,5% 100 140 120 Total 99 731 4 661 4,7% 7,0% 2,9% 4,5% - - Century CityP 46 480 1 781 3,8% 13,2% 14,9% 15,3% 155 175 165 A 250 629 22 021 8,8% 11,9% 10,7% 7,6% 130 175 140 B 39 563 1 726 4,4% 11,5% 12,7% 14,8% 110 110 110 Total 336 672 25 528 7,6% 12,1% 11,5% 9,5% 17 000 9 000 PinelandsA 200 975 1 322 0,7% 0,9% 0,9% 0,9% 135 145 140 B 36 741 3 757 10,2% 9,5% 15,0% 21,0% 105 120 108 Total 237 716 5 079 2,1% 2,2% 2,9% 3,8% - - WaterfrontP 44 000 820 1,9% 4,4% 5,4% 0,0% 235 235 235 A 69 555 91 0,1% 2,5% 3,3% 8,7% 160 160 160 B 6 298 - 0,0% 0,0% 0,0% 0,0% - - Total 119 853 911 0,8% 3,1% 3,8% 6,4% 7 000 4 000 235

18


B 39 563 1 726 4,4% 11,5% 12,7% 14,8% 110 110 110 Total 336 672 25 528 7,6% 12,1% 11,5% 9,5% 17 000 9 000 PinelandsA 200 975 1 322 0,7% 0,9% 0,9% 0,9% 135 145 140

RivoniaA 199 784 15 127 8,0% 10,1% 9,9% 10,3% 135 162 137 B 198 258 14 852 7,9% 10,1% 10,0% 10,3% 136 163 138 C 196 732 14 577 7,9% 10,2% 10,0% 10,4% 137 163 138 Total 195 207 14 303 7,9% 10,2% 10,1% 10,4% 138 164 138 -5 861 1 352

eTHEKWINI MUNICIPALITYBALLITOP 7 144 100 1,4% 0,0% 0,0% 0,0% 172 172 172 A 17 230 2 042 11,9% 11,7% 11,7% 9,0% 105 169 110 B 8 578 526 6,1% 6,1% 6,1% 5,7% 70 75 73 C 12 991 494 3,8% 1,3% 1,3% 8,0% 70 70 70 Total 45 943 3 162 6,9% 5,9% 5,9% 7,4% 6 700 6 700 131 BEREAA 55 621 1 772 3,2% 4,3% 4,6% 7,6% 95 150 125 B 34 983 7 945 22,7% 16,5% 16,5% 19,8% 75 130 110 C 17 653 606 3,4% 6,5% 17,1% 15,4% 115 115 115 Total 108 257 10 323 9,5% 8,6% 10,5% 12,7% - - CBD DURBANA 207 704 43 186 20,8% 22,4% 16,7% 16,6% 70 109 90 B 206 749 32 888 15,9% 13,8% 8,7% 8,7% 50 100 78 C 310 717 51 480 16,6% 18,4% 14,7% 14,7% 35 90 56 Total 725 171 127 553 17,6% 18,3% 13,9% 13,9% - - HILLCREST/GILLITSP 6 267 668 10,7% 10,2% 39,7% 41,9% 120 145 120 A 26 965 2 522 9,4% 1,7% 2,9% 1,3% 110 140 120 B 6 402 332 5,2% 7,0% 5,5% 3,7% 110 130 115 C 1 446 65 4,5% 11,5% 14,0% 14,0% 115 115 115 Total 41 080 3 587 8,7% 4,3% 9,6% 10,1% - - UMHLANGA/LA LUCIAP 22 395 418 1,9% 10,7% 12,9% 10,1% - - A 341 493 17 613 5,2% 5,5% 5,3% 5,8% 110 240 136 B 25 251 1 625 6,4% 17,4% 17,0% 8,2% 100 130 120 Total 389 140 19 656 5,1% 7,0% 7,0% 6,3% 3 500 - WESTVILLEA 65 221 10 083 15,5% 6,7% 7,1% 8,5% 120 151 130 B 136 555 11 847 8,7% 7,5% 7,6% 6,1% 85 147 108 Total 201 776 21 931 10,9% 7,2% 7,5% 6,9% 4 000 - CITY OF TSHWANEARCADIAA 125 570 9 537 7,6% 7,6% 7,6% 3,6% 115 150 133 B 119 310 12 073 10,1% 10,0% 10,0% 10,5% 80 99 85 C 110 610 1 063 1,0% 1,0% 1,1% 1,1% 70 90 80 Total 355 490 22 673 6,4% 6,3% 6,4% 5,0% - - BROOKLYN/NIEUW MUCKLENEUK/GROENKLOOF/WATERKLOOFA 121 410 6 313 5,2% 5,0% 5,4% 3,7% 135 180 154 B 132 964 13 059 9,8% 6,3% 6,3% 8,5% 110 164 120 Total 254 374 19 372 7,6% 5,7% 5,8% 5,6% - - CBD PRETORIACBD PRETORIAA 134 580 1 789 1,3% 1,3% 1,3% 1,3% 65 65 65 B 362 472 40 515 11,2% 11,2% 12,5% 12,5% 60 100 80 C 210 300 23 621 11,2% 10,0% 10,1% 3,7% 60 95 78 Total 707 352 65 925 9,3% 9,0% 9,7% 7,8% - - CENTURION CBDA 214 430 23 709 11,1% 10,9% 11,4% 13,4% 70 209 130 B 233 347 52 054 22,3% 21,5% 21,6% 21,4% 65 143 98 Total 447 777 75 763 16,9% 16,5% 16,8% 17,7% - - HATFIELD/HILLCRESTA 86 630 11 476 13,2% 11,0% 9,7% 7,8% 135 175 150 B 194 890 16 259 8,3% 10,9% 11,3% 11,5% 80 165 101 Total 281 520 27 735 9,9% 10,9% 10,9% 10,4% 13 000 8 900 215 HIGHVELD TECHNOPARK & EXTENSIONSA 422 520 36 826 8,7% 5,8% 4,9% 8,3% 103 208 130 B 167 532 16 774 10,0% 7,6% 9,6% 13,1% 77 105 102 Total 590 052 53 600 9,1% 6,3% 6,2% 9,7% 35 000 35 000 140 LYNNWOOD/MENLO PARK/PERSEQUOR PARK/HAZELWOODP 44 680 1 393 3,1% 3,1% 3,1% 3,1% 166 166 166 A 74 186 2 153 2,9% 4,6% 4,9% 4,6% 128 165 140 B 111 390 14 878 13,4% 13,4% 12,0% 12,6% 80 120 108 C 13 800 - 0,0% 0,0% 0,0% 0,0% - - Total 244 056 18 424 7,5% 8,2% 7,6% 7,8% 5 060 5 060 175 MENLYN/FAERIE GLEN/ASHLEA GARDENSA 232 957 26 470 11,4% 9,8% 9,6% 8,6% 110 215 190 B 135 100 17 123 12,7% 11,0% 11,0% 8,7% 97 130 113 Total 368 057 43 593 11,8% 10,2% 10,1% 9,2% 12 575 10 678 205 SILVER LAKES/ THE WILLOWSA 68 697 3 090 4,5% 5,1% 6,3% 7,4% 130 160 146 B 30 890 250 0,8% 0,8% 0,8% 0,8% 110 110 110 C 3 000 169 5,6% 2,3% 2,3% 3,4% 85 85 85 Total 102 587 3 509 3,4% 3,7% 4,5% 5,1% 5 500 5 500 165 Pta Other Eastern Suburbs/ Route 21A 85 319 8 294 9,7% 10,6% 10,8% 8,8% 70 135 110 B 252 439 30 106 11,9% 12,4% 12,3% 11,6% 75 145 105 C 33 810 2 170 6,4% 6,4% 6,1% 6,1% 70 110 90 Total 371 568 40 570 10,9% 11,5% 11,3% 10,0% - - SUNNYSIDEC 72 700 1 266 1,7% 1,7% 1,6% 1,6% 68 85 75 Total 72 700 1 266 1,7% 1,7% 1,6% 1,6% - - NELSON MANDELA BAY MUNICIPALITYCENTRAL/PARK DRIVEB 8 388 - 0,0% 0,0% 0,0% 17,7% - - Total 8 388 - 0,0% 0,0% 0,0% 17,7% - - GREENACRESP 4 287 - 0,0% 0,0% 0,0% 2,3% - - A 18 474 2 094 11,3% 11,2% 11,2% 2,2% 100 135 125 B 48 416 6 445 13,3% 13,5% 14,9% 15,1% 75 130 88 C 747 - 0,0% 0,0% 0,0% 0,0% - - Total 71 924 8 539 11,9% 12,0% 12,9% 10,9% - - NEWTON PARKP 16 621 800 4,8% 0,0% 9,6% 9,6% 135 135 135 A 967 - 0,0% 0,0% 0,0% 0,0% - - B 3 514 1 007 28,7% 31,5% 37,2% 37,2% 70 70 70 Total 21 102 1 807 8,6% 5,2% 13,8% 13,8% - - WALMER/FAIRVIEW




(m2)Gross Asking

RentTotal Rentable

Area (m2)


(m2)Vacancy Rate

(%)


19


CBD PRETORIAA 134 580 1 789 1,3% 1,3% 1,3% 1,3% 65 65 65 B 362 472 40 515 11,2% 11,2% 12,5% 12,5% 60 100 80 C 210 300 23 621 11,2% 10,0% 10,1% 3,7% 60 95 78 Total 707 352 65 925 9,3% 9,0% 9,7% 7,8% - - CENTURION CBDA 214 430 23 709 11,1% 10,9% 11,4% 13,4% 70 209 130 B 233 347 52 054 22,3% 21,5% 21,6% 21,4% 65 143 98 Total 447 777 75 763 16,9% 16,5% 16,8% 17,7% - - HATFIELD/HILLCRESTA 86 630 11 476 13,2% 11,0% 9,7% 7,8% 135 175 150 B 194 890 16 259 8,3% 10,9% 11,3% 11,5% 80 165 101 Total 281 520 27 735 9,9% 10,9% 10,9% 10,4% 13 000 8 900 215 HIGHVELD TECHNOPARK & EXTENSIONSA 422 520 36 826 8,7% 5,8% 4,9% 8,3% 103 208 130 B 167 532 16 774 10,0% 7,6% 9,6% 13,1% 77 105 102 Total 590 052 53 600 9,1% 6,3% 6,2% 9,7% 35 000 35 000 140 LYNNWOOD/MENLO PARK/PERSEQUOR PARK/HAZELWOODP 44 680 1 393 3,1% 3,1% 3,1% 3,1% 166 166 166 A 74 186 2 153 2,9% 4,6% 4,9% 4,6% 128 165 140 B 111 390 14 878 13,4% 13,4% 12,0% 12,6% 80 120 108 C 13 800 - 0,0% 0,0% 0,0% 0,0% - - Total 244 056 18 424 7,5% 8,2% 7,6% 7,8% 5 060 5 060 175 MENLYN/FAERIE GLEN/ASHLEA GARDENSA 232 957 26 470 11,4% 9,8% 9,6% 8,6% 110 215 190 B 135 100 17 123 12,7% 11,0% 11,0% 8,7% 97 130 113 Total 368 057 43 593 11,8% 10,2% 10,1% 9,2% 12 575 10 678 205 SILVER LAKES/ THE WILLOWSA 68 697 3 090 4,5% 5,1% 6,3% 7,4% 130 160 146 B 30 890 250 0,8% 0,8% 0,8% 0,8% 110 110 110 C 3 000 169 5,6% 2,3% 2,3% 3,4% 85 85 85 Total 102 587 3 509 3,4% 3,7% 4,5% 5,1% 5 500 5 500 165 Pta Other Eastern Suburbs/ Route 21A 85 319 8 294 9,7% 10,6% 10,8% 8,8% 70 135 110 B 252 439 30 106 11,9% 12,4% 12,3% 11,6% 75 145 105 C 33 810 2 170 6,4% 6,4% 6,1% 6,1% 70 110 90 Total 371 568 40 570 10,9% 11,5% 11,3% 10,0% - - SUNNYSIDEC 72 700 1 266 1,7% 1,7% 1,6% 1,6% 68 85 75 Total 72 700 1 266 1,7% 1,7% 1,6% 1,6% - - NELSON MANDELA BAY MUNICIPALITYCENTRAL/PARK DRIVEB 8 388 - 0,0% 0,0% 0,0% 17,7% - - Total 8 388 - 0,0% 0,0% 0,0% 17,7% - - GREENACRESP 4 287 - 0,0% 0,0% 0,0% 2,3% - - A 18 474 2 094 11,3% 11,2% 11,2% 2,2% 100 135 125 B 48 416 6 445 13,3% 13,5% 14,9% 15,1% 75 130 88 C 747 - 0,0% 0,0% 0,0% 0,0% - - Total 71 924 8 539 11,9% 12,0% 12,9% 10,9% - - NEWTON PARKP 16 621 800 4,8% 0,0% 9,6% 9,6% 135 135 135 A 967 - 0,0% 0,0% 0,0% 0,0% - - B 3 514 1 007 28,7% 31,5% 37,2% 37,2% 70 70 70 Total 21 102 1 807 8,6% 5,2% 13,8% 13,8% - - WALMER/FAIRVIEWA 21 727 1 860 8,6% 25,6% 25,6% 27,1% 100 110 105 B 3 011 244 8,1% 8,1% 8,1% 8,1% 85 85 85 Total 24 738 2 104 8,5% 23,3% 23,3% 24,6% 1 000 1 000 140




(m2)Gross Asking

RentTotal Rentable

Area (m2)


(m2)Vacancy Rate

(%)


20



ABOUT MSCIFor more than 40 years, MSCI’s research-based indexes and analytics have helped the world’s leading investors build and manage better portfolios.

Clients rely on our offerings for deeper insights into the drivers of performance and risk in their portfolios, broad asset class coverage and innovative research.

Our line of products and services includes indexes, analytical models, data, real estate benchmarks and ESG research. MSCI serves 98 of the top 100 largest money managers, according to the most recent P&I ranking.

For more information, visit us at www.msci.com.

Report compiled by:

21



NOTICE AND DISCLAIMERThis document and all of the information contained in it, including without limitation all text, data, graphs, charts (collectively, the “Information”) is the property of MSCI Inc. or its subsidiaries (collectively, “MSCI”), or MSCI’s licensors, direct or indirect suppliers or any third party involved in making or compiling any Information (collectively, with MSCI, the “Information Providers”) and is provided for informational purposes only. The Information may not be modified, reverse-engineered, reproduced or redisseminated in whole or in part without prior written permission from MSCI.

The Information may not be used to create derivative works or to verify or correct other data or information. For example (but without limitation), the Information may not be used to create indexes, databases, risk models, analytics, software, or in connection with the issuing, offering, sponsoring, managing or marketing of any securities, portfolios, financial products or other investment vehicles utilizing or based on, linked to, tracking or otherwise derived from the Information or any other MSCI data, information, products or services.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. NONE OF THE INFORMATION PROVIDERS MAKES ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF), AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH INFORMATION PROVIDER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by applicable law, in no event shall any Information Provider have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits) or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited, including without limitation (as applicable), any liability for death or personal injury to the extent that such injury results from the negligence or willful default of itself, its servants, agents or sub-contractors.

Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results. The Information should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. All Information is impersonal and not tailored to the needs of any person, entity or group of persons. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy.

It is not possible to invest directly in an index. Exposure to an asset class or trading strategy or other category represented by an index is only available through third party investable instruments (if any) based on that index. MSCI does not issue, sponsor, endorse, market, offer, review or otherwise express any opinion regarding any fund, ETF, derivative or other security, investment, financial product or trading strategy that is based on, linked to or seeks to provide an investment return related to the performance of any MSCI index (collectively, “Index Linked Investments”). MSCI makes no assurance that any Index Linked Investments will accurately track index performance or provide positive investment returns. MSCI Inc. is not an investment adviser or fiduciary and MSCI makes no representation regarding the advisability of investing in any Index Linked Investments.Index returns do not represent the results of actual trading of investible assets/securities. MSCI maintains and calculates indexes, but does not manage actual assets. Index returns do not reflect payment of any sales charges or fees an investor may pay to purchase the securities underlying the index or Index Linked Investments. The imposition of these fees and charges would cause the performance of an Index Linked Investment to be different than the MSCI index performance.

The Information may contain back tested data. Back-tested performance is not actual performance, but is hypothetical. There are frequently material differences between back tested performance results and actual results subsequently achieved by any investment strategy. Constituents of MSCI equity indexes are listed companies, which are included in or excluded from the indexes according to the application of the relevant index methodologies. Accordingly, constituents in MSCI equity indexes may include MSCI Inc., clients of MSCI or suppliers to MSCI. Inclusion of a security within an MSCI index is not a recommendation by MSCI to buy, sell, or hold such security, nor is it considered to be investment advice.Data and information produced by various affiliates of MSCI Inc., including MSCI ESG Research Inc. and Barra LLC, may be used in calculating certain MSCI indexes. More information can be found in the relevant index methodologies on www.msci.com. MSCI receives compensation in connection with licensing its indexes to third parties. MSCI Inc.’s revenue includes fees based on assets in Index Linked Investments. Information can be found in MSCI Inc.’s company filings on the Investor Relations section of www.msci.com.

MSCI ESG Research Inc. is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc. Except with respect to any applicable products or services from MSCI ESG Research, neither MSCI nor any of its products or services recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities, financial products or instruments or trading strategies and MSCI’s products or services are not intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Issuers mentioned or included in any MSCI ESG Research materials may include MSCI Inc., clients of MSCI or suppliers to MSCI, and may also purchase research or other products or services from MSCI ESG Research. MSCI ESG Research materials, including materials utilized in any MSCI ESG Indexes or other products, have not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body.Any use of or access to products, services or information of MSCI requires a license from MSCI. MSCI, Barra, RiskMetrics, IPD, FEA, InvestorForce, and other MSCI brands and product names are the trademarks, service marks, or registered trademarks of MSCI or its subsidiaries in the United States and other jurisdictions. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS)” is a service mark of MSCI and Standard & Poor’s.

22

SAPOA - South African Property Owners Association

T: (011) 883 0679 - F: (011) 883 0684Email:[email protected]:www.sapoa.org.za

Physical Address: Paddock View, Hunt’s End Office Park36 Wierda Road West, Wierda Valley, Sandton

Postal Address: PO Box 78544, Sandton 2146

Report Compiled by:

research office vacancy report - sapoa.org.za · t 011 883 0679 011 883 0684...

Documents