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Office space vacancy report

Date: 2021-11-15 14:33:25

Office space vacancy report

The latest Office Vacancy Survey (OVS) report for the third quarter of 2021 has been published by industry body, the SA Property Owners Association (Sapoa).  

The data released at the end of September for quarter three shows a continued rise in eThekwini’s office vacancies, all except for Hillcrest which has decreased to 3.10 percent.

The Durban CBD with 782 309m2 of office space is South Africa’s fourth largest office node but while it has the highest office vacancy rate in the country in percentage terms, its actual vacant space currently is just over 168 000m2. According to the Sapoa report, the eThekwini metro which includes the Durban CBD and other office nodes like uMhlanga/La Lucia Ridge, Westville/Westway and Berea/Musgrave has an overall office vacancy rate of 15.5 percent. This means that of the metro’s around 1.7 million sqm of office space, 262 840m2 stands vacant.

The City’s key decentralised office node of uMhlanga/La Lucia Ridge with over 500 000m2 of office space, around Old Mutual’s Gateway Theatre of Shopping, has a lower office vacancy rate of 8.5 percent. This helped in bringing the metro’s overall vacancy rate down, despite the more than 21 percent vacancy rate of the Durban CBD. 

The report also reveals that this is the worst the office property sector has been in terms of vacancies, with the previous record vacancy rate of 15 percent being logged in March this year, matching a 2003 record. “At Q3 2021, South Africa’s office vacancy rate had reached a new all-time high of 15.4 percent. The overall office vacancy rate increased 40bps [basis points], after matching the previous all-time high of 15 percent recorded in March 2003,” the OVS report noted.
The recovery in office space uptake has been slow for the past quarters and the possibility of a new COVID-19 variant poses further uncertainty around office occupancy. As the working from home culture continues, property owners and developers battle to find tenants. 

It is evident that if the country is still in lockdown, there will be a continued decrease in demand for office space. This poses a challenge for developers who may have to halt various new projects.