New owners confirm it will not be converted for residential demands
The iconic 1 Thibault Square on the corner of Hans Strydom and Long streets has been sold to the Bestinver Group, and will continue to serve as office accommodation despite the demand for residential property in Cape Town’s CBD.
The building – formerly the BP Centre – changed hands earlier this month. Its new owners acknowledged that its magnificent views and site orientation meant it would be suitable for a residential conversion, particularly as developers scour the city centre looking for such opportunities.
However, Steve Rennie of Rennie Property, property service provider to Bestinver, has confirmed “it will not go that way”. He says the group recognised the CBD’s continued need for good quality office space, especially as the supply of offices was shrinking due to increasing residential conversions.
Rental properties in well-managed Premium, A and B Grade offices in the CBD have been performing well since 2015 and will continue to do so into the future. Rennie says the limited supply of office space in the city centre also bodes well for commercial property owners to achieve higher rentals.
Although there are no firm plans for a major refurbishment of the building, this has not been ruled out.
According to JLL’s Cape Town Office Report for the second quarter of this year, Grade A office space in the CBD averaged R143/m² and Grade P R185/m². These figures reflected those of office space rentals in Century City, and were higher than the average rentals achieved in Bellville. However, they were lower than the office rentals achieved in the Waterfront, which averaged R183/m² and R235/m² respectively.
In these four nodes, the average rental achieved for Grade A space recorded an average rental of R150/m² and R196/m² for Grade P.
Office vacancies in the Waterfront were also the lowest at only 3.2%. This was followed by 4.1% in Bellville, 8% in Century City, and 11.3% in the CBD.
On a municipal level, the SA Property Owner Association’s office vacancy report for Q3 showed that, of the larger metros, the lowest office vacancy rate at the end of the quarter was the City of Cape Town with 6.8%. The highest vacancy rate among the larger metros was the 12.6% recorded by the City of Joburg, followed by the eThekwini Municipality at 11.7%.
Of the smaller metros Tshwane recorded 10.6% and Nelson Mandela Bay recorded 6.5%.