Cape Town Office Market Report
2017 set for rental growth as economy improves, but the city continues to struggle to cater to large occupiers Q4 2016
1 In association with Central Baker London Office Street Market Report Properties | Q3 2016 Overview Cape Town
Global confidence in the City of Cape While the economy is not out of the Town has reflected in two global rankings, woods yet, any recovery in 2017 will getting the city off to a positive start in only work to boost the Cape Town 2017. Cape Town featured in the Financial office market. The city has also seen a Mail’s FDI Intelligence report, ranking 21 diversification in interested occupiers. in the world for its FDI strategy, Invest Traditionally viewed as the financial Cape Town. Cape Town also featured capital of South Africa, Cape Town is 37th in the world as a city where property now attracting many ICT businesses and investors should invest, according to a is one of the largest business process report produced by Wealth X, surveying outsourcing locations in South Africa. investment activity by global high net worth individuals. More than a holiday Although investor and occupier destination, Cape Town’s commitment confidence is strong, one of the major to investing in technology, improved challenges is the lack of large office transport and world-class infrastructure developments that are attractive to has allowed it to attract highly skilled large occupiers. Although the city saw individuals, as well as companies from the completion of almost 90,000m² various sectors from within and outside of of developments in 2016, only two the country. developments were over 10,000m² and none reached 20,000m². This means All this is evident in the city’s office market that Cape Town is likely to continue to performance in 2016. Over the past year, lose large occupiers to Johannesburg. Cape Town has seen growing interest from Is this an opportunity that the city will global occupiers including DSG and the Norwegian Investment Fund, while KPMG pursue in the long run? and EY renewed their commitment to the city. Cape Town’s office vacancy rate sits at 3.1% below the national office vacancy rate. Rental growth is also higher at 8.0%
2 Cape Town Office Market Report | Q4 2016 In numbers
Rental growth Rents falling slowing
Rental growth Rents rade P accelerating bottoming rade A out 7.6%Office vacancies rade B