Real estate occupancy in Johannesburg is experiencing a shift, with uptake of new spaces on the rise while older buildings witness a withdrawal by occupants looking for modern architecture and décor.
The Jones Lang LaSalle real estate overview for Johannesburg finds that in the third quarter real estate uptake focused entirely on new office units in prime locations, with older buildings increasingly becoming vacant.
The report also makes note of the increasing rental prices for prime spaces in the third quarter.
Head of research Ndibu Motaung told bdlive on Friday that particularly attractive locations pin-pointed based on third quarter rental trends are office spaces in Bryanston, Melrose, Parktown, Rosebank and Sandton.
Motaung revealed the largest example of this trend, saying:” One of the biggest deals worth noting this quarter is Ernst and Young’s relocation from Wanderers Office Park to Sandton, taking up about 16,000m², with intended occupation only in 2014.”
Other note-worthy moves in the third quarter are, according to Motaung, Samsung’s deal for a 6,000 m2 space in Bryanston, Tronox signing for 1,600 m2 in Sandton, and Alan Grey opting for a 1,000 m2 space in Rosebank.
The reason for the migration to newer spaces away from older buildings is thought to be based on occupants wanting modern amenities and décor, and mounting expectations of higher quality, with Motaung commenting: “…a similar trend of tenants moving between nodes is still observed in the market, leaving older buildings for new with quality finishings.”
Although no particularly grand projects were completed in the third quarter, Jones Lang LaSalle expects construction of new office spaces to thrive in prime locations to meet the shift in demand for spaces in Rosebank, Parktown and Sandton in particular. Motaung drew attention to three high-profile projects expected to reach completion in the next quarter – a 65,000 m2 Standard Bank block in Rosebank; a 22,000 m2 office for KPMG in Parktown; and a 36,000m2 space for Alexander Forbes in Sandton.