pre-feasibility assessment report - Innovationeasterncape.co.za

African Development Economic ConsultantsADECTable 3. OFFICE INVENTORY, NELSON MANDELA BAY METRO, 2009Office Node Area (m 2 ) PercentWalmer 14,263 4%Central/ CBD 270,203 72%Newtown Park 51,570 14%Milpark/ Mount Road 19,599 5%Other Suburban 19,251 5%Total 374,886 100%Source:Nelson Mandela Bay MunicipalityThe main suburban office nodes combined account for only 28% of theoffice inventory in this sample. Of these areas, Newtown Park is largest, with51,570 square metres or 14% of the total inventory. Based on the constructiontrend data, the total office inventory has increased by about 13.8% since 2000,or an average of 1.53% per year.Grading. A-grade office is the highest-quality space in the market. A-grade offices are generally less than ten years old, with high-quality finishes,amenities like air conditioning, elevators, and onsite parking (underground orabove ground). If older than 10 years, the office space has usually undergonerenovation and refurbishment. A-grade space usually commands the highestrentals in the market. B-grade office space is typically 10- to 20 years old. Itmay not have air conditioning and other amenities like on-site parking. C-gradebuildings are generally older, at least 20 to 30 years old. Although they may bein fairly good condition, the finishes are not completed to modern standards. C-grade space is less likely to have amenities like air conditioning and parking.Examples of A-grade office space in the NMBM Market Area include theNedcor property in Greenacres and the Alexander Forbes Building on CapeRoad. A-grade office space is supplied in various locations throughout NelsonMandela Bay Metro. B-grade office space is largely found along Cape Roadand in Newtown Park and VSN Centre. Vacancy rates in these areas arerelatively low. Examples of C-grade space can be found in the Newtown Parkarea, as well as the Old Mutual and Federal buildings in the CBD. Much of theregion’s C-grade (and lower) space is concentrated in the CBD.Vacancy Trends. Office vacancy averages 9.6% in the NMBM MarketArea. Vacancy rates have been increasing for the past three years, up from6.4% in 2007. By far the highest vacancy rate is in the core portions of the CBDsub-market, averaging en estimated 60% over the past three years. Thus, themajority of office space located in the central business district is vacant,according to these data. Nearby areas of central Port Elizabeth also have highvacancy rates, but the Govan Mbeki Corridor in the CBD has much higherlevels of vacant space. Meanwhile, occupancy in most of the suburban areashas been relatively high for the last several years, with vacancy rates of less103 Algernon Road, Norwood (Johannesburg). Tel (011)728-1965 / 6690 Fax (011)728-8371Adec@ADEC1.com. Suite 131, Private Bag X5, Norwood 2117 SOUTH AFRICA 65