Coronavirus leads to rising office vacancy rates

 

'To Let' signs are becoming more common. The lockdown has turned an oversupply of office space in South Africa into a major problem for developers and owners.

CAPE TOWN - The coronavirus lockdown has turned an oversupply of office space in South Africa into a major problem for developers and owners. 

The office vacancy rate in the country is at a record high. 

According to the South African Property Owners Association, over 12 percent of office space is not being used.

READ: COVID-19: Property prices to fall this year 

The vacancy rate of Cape Town’s office space rose by one percent in the last quarter. 

It’s worse in Johannesburg and in Durban, with 20 percent of office buildings empty.

"We’ve seen a marked increase in the request from tenants to sublet surplus space," said South African Property Owners Association's Dave Russel.

"In addition to that, we’ve got more vacancies that have come about in fact there’s no good time for a pandemic but with our economy with the way it was landlords were battling before the pandemic."

SA lockdown: High-end property owners downscaling 

Only 42 out of every 100 prime office spaces are currently occupied.

"We’ve already seen landlords in certain properties reducing their asking rental quite significantly," Russel said.

"It also affects the feasibility of new development so the knock-on is your construction industry is negatively affected in a time we’re going to need this because the construction industry is a large employer in SA and that will now demise as a result of property values."

The role of the office building might have to be reconsidered

Source
eNCA