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The established Parktown office node continues to attract tenants looking for competitive rentals and an accessible location.
Offering primarily A- and B-grade properties for large and small office users, gross achieved rentals are around R95/m²/month for B-grade and R140/m²/month for A-grade offices according to the Broll Parktown Office Market Report.
“In the current economic environment, tenants are being driven by tighter budgets and this will increase the demand for more affordable rentals and government departments continue to show interest in the node,” says Angie Stroebel, Broll Commercial Broker for Parktown.
Home to big corporates including KPMG, Tiso Blackstar Group, SAA, MTN, Transnet and Engen, Parktown is located close to the Johannesburg CBD and Braamfontein with easy access to the M1 freeway and an excellent public transport infrastructure.
“With big users such as Coke, AIG, Cambridge Foods and LabourNet moving out of the Parktown node, we continue to see large vacancies opening up which is likely to drive rental prices down,” she says.
Demand for office space in Parktown is generally from smaller users, however, newly built The Hill on Empire which is home to the Tiso Blackstar Group, offers energy efficient A-grade space for larger users.
The report further notes that many companies who are leasing only commit to shorter lease terms, with a high demand for SME’s to purchase rather than lease thus increasing demand for sectional title offices.
The node houses many NGO’s, Government organisations, accounting firms and legal practices as many of their employees rely heavily on public transport.
According to the report, some office buildings have been or are currently being converted into student accommodation to cater for educational facilities in and surrounding the Parktown area. Meanwhile, the second phase of Hill on Empire is scheduled to commence before the end of 2017.
Stroebel says Trueprop is planning to develop a new tenant driven standalone office building measuring approximately 1,500m2 split over three floors at 7 Anerley Road. In Richmond on the corner of Barry Hertzog and Napier, the Moolman Group is currently busy with the redevelopment of what was originally the Rand Steam Laundry site. It will offer 5,500m² of retail with a focus on upmarket restaurants and is scheduled to open in October 2018.
“Parktown still remains a sought-after office node offering competitive rentals in attractive buildings with well-established infrastructure,” she adds.