Analyzing Office Demand

Comparing the take up emanating from new developments as well as from the existing stock in the market allows for an analysis of the source of office take up or demand to be conducted. New development supply is principally calculated from the SAPOA Office Vacancy Survey data, being the difference between committed new supply and the vacancy level attached thereto.

On existing stock, the net take up is calculated being the relative difference between the total sample and the amount of occupied space at any one point in time. Both these data series are calculated on a quarterly basis and graphed below per city.
 
In the case of Johannesburg’s decentralized nodes (excluding the CBD) , the predominant trend over the past six years has been take up occurring in new developments; however sine 2005, demand has also emerged from existing stock, whilst demand from new developments has leveled off a little and now beginning to pick up once again.

This trend can be explained as a combination of upgrading/refurbishing activity as well as relatively low levels of new supply, which together have ensured that the aggregate vacancy rate has come down to 6.01% - a level previously enjoyed  between the period 1995-2000. Encouraging for the Johannesburg office market is that the present trend is pointing to take up in both new and existing buildings and points to an improving performance for funds currently holding and developing office assets.

For more information, research and consulting please contact:

Marc Schneider – eProp Research
Tel: +27 11 441 0377
Web site: www.eprop.co.za

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