03 / 05 / 2007
In Tyger Valley, a decentralised region in the Western Cape, office leasing is experiencing growth due to a low vacancy rate. According to Mr Pieter-Jozua Erasmus of Capitol Commercial Properties, the vacancy rate for the approximately 320 000sq m office space in the Tyger Valley region, is only about 3,8%. Erasmus adds that it will be difficult for developers of new buildings, to be completed by 2008, to break even at gross lease rates of less than R115/sq m (excl VAT).
In his opinion, current rental agreements will probably be adjusted upward when they expire, seeing that lease prices in the region increase quicker than the escalation on existing lease contracts. Owing to the fast growth in lease income, it would appear that lessors of business properties in Tyger Valley are eager to sign shorter lease contracts, whereas tenants are trying to extend current contracts for as long as possible.
Erasmus also says the main reason for the low vacancy rate in Tyger Valley is the fact that relatively few business properties were developed over the past five years.
The influx of many companies to the region has lead to economic growth, and greater demand for business space. This region is closer for clients from the Boland and the Malmesbury region, and the area has also experienced several high density residential developments over the past few years.
"Many companies realise that their employees live in the area, and that is yet another reason to move. The other day I spoke to a company representative whose company wants to move here when it was discovered that 80 percent of its employees live in the northern suburbs," says Erasmus.
Other reasons why companies flock to this area, according to Erasmus, is the availability of parking, and the drive to reduce traffic to the Cape Town city bowl. New developments in the Tyger Valley area include The Cliffs, which should be completed by June this year. The first phase of this development by the Remey Group is an 8 300sqm building which forms part of the Tyger Falls development, to the west of the Tyger Valley shopping centre. The second phase of 500sq m will probably be announced soon.
Construction on two buildings of the Avanti development, which also forms part of the Tyger Falls development, was recently started, and it should be completed by the end of 2008.
Avanti consists of retail space of 2 089sq m at ground level and A grade office space of 6 272sq m on the levels above.
The developer of Avanti is Arun Holdings and according to Johan Laubscher, director of Arun Holdings, the location of Avanti was selected for the visibility and direct access from busy traffic routes in the area.
The office space consists of three floors above the retail area, and a penthouse is being developed on the top floor. Laubscher says that ample provision has been made for parking. Existing pedestrian routes in the region were also taken into account. – Carin Smith
Article courtesy of Sake24