All Cape Town real estate markets continue to perform well
Like the rest of the country, the market also had to contend with the country’s volatile political and economic climate.
Despite these challenges, Baker Street Properties’ latest Street Smart Insights report states that Cape Town real estate has continued to receive consistent investment in all sectors, including commercial, industrial, retail, leisure and residential.
Furthermore, landlords and developers are taking water restrictions “very seriously”, and are responding with water contingency plans and efficient saving technologies.
“There has been a continuation of conversions from office to residential property, particularly in the CBD,” the report states, adding: “The continued demand for convenience and compact urban living in Cape Town has resulted in upmarket apartment developments in and around all main commercial nodes.”
According to Baker Street Properties, commercial tenant activity across the city also suggests there is no clear preference for any particular node, with all the surveyed office nodes welcoming new major corporate occupiers over the past year.
“The Cape Town real estate market is increasingly showing growth trends similar to other global cities, wherein residents opt to ‘live, work and play’ in the office node of their employers or businesses.”
Trend analysis in the report shows 2017 has been a good year for both the V&A Waterfront and Century City, with around 30000m² and 40000m² of office space developed respectively. The trend is expected to continue with Waterway House in the Waterfront presently marketed at a gross
rental rate of R235/m², says Baker Street
“Another premier grade building
is presently under construction in
Century City with 50% of the property
taken by Discovery.”
However, while the trend towards
firmer rents is expected to continue in
the short term, the company cautions
that rents in some segments of the market,
particularly in older and less efficient
properties, “may come under pressure”.
Furthermore, the report says the northern
and southern suburbs have seen little
new development. As a result, together
with steady demand, vacancy levels in both
nodes are “very low”.
“The southern suburbs are proving
especially popular, with some buildings
in Claremont and Newlands enjoying
above-average rental growth. Total vacancies
in Bellville are 4.9% and in Claremont
2.9% at October 2017. Escalation rates
throughout the market are averaging 8%
In its Q3 office market report JLL confirms
that the sector’s resilience in the first
half of the year continued in the second
half. The July to September period also
saw a decline in vacancy rates of all major
asset types in Cape Town, including grade
“The most impressive decline was in
grade P accommodation, which recorded
a vacancy rate of 7.7% from 9.4% in Q2
All Grade P nodes recorded notable
growth, including Tygervalley/Bellville at
5.0%, Century City at 6.0% and grade A
stock in the prime node of the Waterfront
up by 4.0% in one quarter.