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Thursday Feb 17, 2022

Market shifts in Cape Town's commercial property landscape

Several key factors have precipitated a number of emergent trends and market shifts in the commercial sector since the advent of covid, not least the fact that for the first time ever, qualifying lease clients have been eclipsed by qualifying buyers.

This is according to Brent Townes, Commercial Property Chief Operating Officer in Cape Town for Lew Geffen Sotheby's International Realty, who says: 'Although this has largely been within the industrial sector which was already dominant before the pandemic, we are also seeing more buyers in the retail segment as well as vacant land for development.

'The majority of sales have been warehousing, retail malls and smaller industrial units for owners to run their businesses and most are local buyers."

Townes adds that this is despite the fact that rental prices have consistently dropped for the past three years as have the lease periods, from five-years, down to three and sometimes even two years.

The beleaguered office sector which bore the brunt of the pandemic, resulting in a massive over-supply of stock, is once again showing signs of revival, but only in certain areas, according to Townes.

'The areas in which we are seeing the most movement are precincts like Century City, Westlake and Tygervalley because they are essentially live/work/play nodes that require little or no travel time and offer the convenience of an array of on-site amenities.

'And, with rental prices remaining constant for the time being, more people are encouraged to take their businesses back into the workplace."

Another notable shift is the growing demand for ‘big box' industrial spaces which were not as sought-after as small-to-medium sized properties prior to the pandemic.

'These are currently in very short supply and even non-existent above 35 000sqm," says Townes, adding that the industrial park take-up along the N7 is going well with the development of medium to larger-sized units.

    
 

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