The amount of empty office space in Sandton, SA's largest decentralised business hub, has surged to a 10-year high of 14,2%, latest figures from the SA Property Owners Association (Sapoa) show.
New development in Sandton has increased sharply over the past two to three years, particularly around the Gautrain station. The bulk of the vacancies are in these state-of-the-art new buildings.
The Sapoa report notes that over the past 12 months alone, the amount of unlet prime space has increased from 2000m² to 54000m².
Rode & Associates property economist John Lottering says the jump in Sandton's vacancy rate probably reflects weak demand for office space as a result of muted employment growth.
He says it is a concern that even more new space is likely to come onto the Sandton market over the next year or two.
Sapoa figures show there is 258000m² of office space under construction or in the pipeline in Sandton.
That's about a third of all new office development currently planned for SA as a whole. The worry for property owners is that rising vacancies will put pressure on rental returns.
