Over the past, few years Cape Town's central city has attracted huge investment with numerous major new developments, renovations and additions completed, says Selwyn Sharon, commercial broker for Pam Golding Properties in the Cape Peninsula.
The top end of Bree Street has become extremely popular, with property owners receiving frequent requests for restaurant, retail and office spaces. A small owner-occupied property in this same street has been modernised with new finishes and parking added, making it impactful and instantly recognisable. A major renovation is under way and nearing completion at 130 Strand Street - to accommodate a college. Touchstone House, near Portside, where commercial, namely office and ground floor retail units, have been sold via sectional title, is also well under construction.
"Further new commercial and mixed-use developments planned for initiation in 2015 are a positive re-enforcement of the city's vibrant business district which has successfully evolved over the past decade to incorporate a strong 'live, work, play' ethos and in so doing, attract a burgeoning and complementary residential component."
In the commercial property market, where ever-increasing operating (utilities) and rental costs impact on tenants and landlords, the majority of office layouts now favour an open plan environment with boardrooms or small meeting rooms utilised to meet clients and a strong focus on kitchen and staff recreational areas with some offices even installing showers for cyclists and runners.
"Security of premises and parking facilities also plays an important role, particularly as users in the IT industry, designers, marketing and creative businesses need to cater for being open longer hours."
Current office vacancies in the central city show that buildings with poor parking ratios, expensive to run air-conditioning systems or in need of upgrading have the highest vacancies and lower than average rental rates. "The advice for landlords is that if they don't maintain, upgrade and spend a fair amount of capital expenditure on their properties on an ongoing basis then large percentages of the buildings are likely to be downgraded from A to B level and result in vacancies or remain vacant. To rectify the situation exteriors need revamping, old offices require gutting with high-energy consuming air-conditioning units replaced, new lifts installed and foyers re-floored and redecorated.
"Parking requirements are high on any tenant's list of priorities, and certain properties in good positions within the central city are remaining vacant due to offering parking ratios below two to three per 100sqm. In addition, monthly parking rentals are starting to peak up to R1500 per month plus VAT for reserved bays," concludes Sharon.
