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Johannesburg - The South African Property Owners Association (Sapoa) office vacancy survey for the first quarter of 2010 released on Thursday showed a continued rise in empty office space in recent months.
Vacancy rates for Sandton, Johannesburg's biggest business node outside the central business district, were at 10.2% by the end of April, up from last quarter's 9.5%.
Other business districts in Johannesburg are also dotted with more "To Let" signs. Rivonia's vacancy rate rose to 19.5% from the last quarter's 18.9% and Randburg saw a 1.3% increase.
Office vacancies saw a similar march north in business areas in Cape Town, Durban and Pretoria.
"A general increase in vacancies started last year," said Marc Schneider, head researcher at IPD SA. "Nevertheless, it's not that traumatic compared to the previous cycles of the late 90s and early 2000s when we saw Johannesburg's vacancy rates in the mid teens."
The entire commercial property industry took a knock during the last year. However, it still outperformed overseas property markets. The local retail sector showed the strongest capital growth of 0.9% and net income growth of 7.8%. All property yields moved out by 25 basis points over 2009 to 8.1%.
Listed property companies with large office portfolios also experienced higher vacancy rates. Growthpoint's vacancy rate rose to 6% for the year ended December 2009, from 5.4% in June 2009.
Approximately 1.1% of the 6% is in four new office developments and two new industrial developments that became available over the last year.
According to Schneider, the levels of new supply are coming down, but the vacancy rates aren't expected to decrease much in 2010.
"We're seeing record highs of investment in existing assets - alterations, refurbishments," said Schneider. "This suggests that [investors] recognise that this is a temporary down cycle and are positioning themselves for the upswing."
- Fin24.com
