DURBAN OFFICE MARKET OVERVIEW AND RENTAL GUIDE - Q1 2023
- April 12, 2023
GENERAL OFFICE OVERVIEW
In late 2021 and during 2022 we have witnessed a significant take up of office space in the prime office nodes throughout eThekwini. It may seem to be acontradiction in many people views considering the economic climate we are experiencing in SA with the challenges we have seen over the last 2 or 3 years, however, the reality on the ground confirms demand has increased and supply is drying up.In this period there has been a noticeable shift in office use, and we do believe a return to office has been embraced by most companies albeit a mixture of workersheading back to the office permanently mixed with hybrid work models.
Added to this is the growth in the contact centre /Business Process Outsourcing(BPO) sector where we have seen unprecedenteddem and for large pockets of spaceto satisfy an ever increasing need for office space to accommodate both local and international operators growing/establishing t heir presence in eThekwini. Thislooks set to continue for some years to come as South Africa currently enjoys the number 1 status in the world for BPO activi ty/ place of business choice.Umhlanga remains the front runner and first choice for corporate South Africa and is now running very low on vacancies particula rly in freestanding office blockswith footplates in excess of 1000m².
Being the preferred location of choice and we have seen more than 75 000m² of quality office space leased in this node over the last 15 months, with the CBD fringeenjoying some 12 000 m ² take up of office space, all driven primarily by the BPO sector. Most of the larger property landlords in Umhlanga are reflecting their lowest vacancy factors for several years(some below 1%1%) which presents a challenge to thelarger enquiries and demand we are seeing currently.The primary vacancies that still exist are a mixture of smaller fragmented office spaces spread amongst several buildings andno large contiguous areas available fortenants seeking suitable premises in the range of 1500 m² upwards.
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