Cape CBD, Atlantic Seaboard experience strong office and retail demand

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Demand is almost across the board, from older buildings to new Grade A prime office space developments and even houses suited for conversion in areas such as Vredehoek and Sea Point.

"Consequently, we have seen rental rates edge up over the last two years by around 9% on average. There are also some areas in the central city, such as Kloof and Long Streets, where high demand is driving rentals rates up, said the agent. Business in the city and on the Atlantic Seaboard is booming and tenants are looking for office and retail space, and are prepared to pay higher rates for the right premises," he added.

"While older Grade A office space in the central city now achieves rental rates of around R100/m on average, and Grade B office space around R75/m, we are seeing the welcome addition of the new developments achieving significantly higher rates. The new Old Mutual Portside office block on Buitengracht Street, which occupies an entire city block, is, for example, seeing good demand at an asking rate of R185/m.

Outside of the CBD

"There is also a growing trend for businesses to opt for commercial space outside of the central city. In Vredehoek, for example, we have just let out the original double-storey Vredehoek farmhouse, which has been newly renovated for commercial use at R104/m. Other popular areas where demand for commercial space, especially converted houses, is increasing are Sea Point and Green Point where rentals of around R100/m are now achieved on average. Another popular building is the Berman Brothers' The Point development in Sea Point, where tenants are now paying rentals of R165/m," said the agent.

In terms of retail space, the influx of especially younger people into the CBD and City Bowl has resulted in increasing demand for restaurant space and clothing retail shops. The emergence of the artist's ateliers and designers, who are combining studios with retail space, has also contributed to the high demand in such areas as Bree and Kloof Streets. Friedberg said that almost every second enquiry for a shop, whether for a restaurant, fashion boutique or even hairdresser, has been for Kloof Street, an area that has become a hub for young and old alike to hang out. Retail space in Kloof Street has consequently spiked to around R250/m on average.

Long Street, a renowned and well-established venue for day and night life for younger urbanites is also seeing high demand, said the agent. With demand exceeding supply here, rental rates have increased to around R250/m and even up to R300/m for smaller units of up to 100m in the trendier locations. This is compared to other parts of town, such as lower Long street, Strand Street and Adderley Street, where tenants pay between R175/m and R200/m.