SA's office property market seems to be improving steadily, but office take-up in Johannesburg's decentralised nodes was a "mind-boggling" 345000m² in the 12 months to March this year.

According to the latest report by property economists Rode & Associates, who obtain their data from commercial property association Sapoa, this take-up is equal to about 7% of the total Johannesburg decentralised office stock in March this year.

Property economist Erwin Rode says this improvement in the office market points to a financial services sector that is recovering in tandem with a healthy economy, and probably signifies that the worst of the information and communications technology slump is "behind us".

The take-up of grades A and B office space in the suburbs of SA remained strong in the first quarter of the year, lifting the national cumulative take-up of space to about 480000m² for the year to March 2004. It was to be expected that most of the take-up of space was in Johannesburg as it is the economic heart of SA.

Main growth areas in Johannesburg are Bryanston-Epsom Downs, with take-up of 75000m² in the second quarter of last year; Midrand, with 51000m² in the last quarter of last year; Sunninghill, with 40000m²; Constantia Kloof Basin, with 28400m²; and Parktown, with 21700m² in the first quarter of this year.

Grades A and B office vacancies in the Johannesburg decentralised office market declined in the first quarter of this year after a steady increase from the third quarter of 2000.

Rode & Associates says the vacancy decline needs to continue before a definite turnaround in the movement of market rentals can be expected.

Stan Garrun, MD of the Investment Property Databank SA, confirms that vacancy levels in the decentralised office areas of Johannesburg are improving. Garrun says Sapoa office vacancy figures for A and B grade office space in central Sandton have declined steadily from the December quarter.

Vacancies in December were 15%, and fell to 14,8% in the March quarter and 13,1% in the June quarter.

Garrun says Parktown has also had a "nice take-up of space": a 21,8% vacancy rate was reported for the December quarter, declining to 17,8% for the March quarter, and holding steady at 17,8% for the June quarter.

Tenants who went to secondtier office space or offices further from the Johannesburg central business district than, say, Sandton, are beginning to shift back to core Johannesburg office areas such as Sandton, Parktown, Rosebank and Bryanston, where rentals are more competitive and there is less of a negative perception about crime.

Business Day