2012GLOBAL REALESTATE MARKETSAnnual review and outlookCairoA number of major occupiers, from both <strong>the</strong>private and public sector, are planning tomove to <strong>the</strong> new CBD, which may causeavailability to increase in <strong>the</strong> city’s existingbusiness parks.In Lusaka, Zambia, over 14,000 sq m of newoffice space is currently under constructionand expected come to <strong>the</strong> market in 2012.While Zambian tenants remain reluctant topre-let space, <strong>the</strong>re has been increasedevidence of pre-let demand from internationalcompanies entering <strong>the</strong> Zambian market.Lusaka’s retail sector has continued to grow,with Levy Business Park and Makeni Junctionadding approximately 40,000 sq m of newretail space in 2011, but no new retailschemes are due <strong>for</strong> completion in 2012.There is currently a surfeit of Grade B officesavailable in Kampala, Uganda, with vacancyrates <strong>for</strong> such space currently standing atapproximately 30%. Occupation costs haverisen considerably as a result of increasedpower outages, which have necessitated <strong>the</strong>use of standby generators <strong>for</strong> longer periods.A number of new office projects weredelivered to <strong>the</strong> market in Dar es Salaam,Tanzania, in <strong>the</strong> second half of 2011, with mostof <strong>the</strong> space being let to tenants moving fromdilapidated premises. Several major officeschemes are currently under construction <strong>the</strong>city, with development activity beingencouraged by strong occupier demand and alack of available space in <strong>the</strong> CBD.Office market activity in Harare, Zimbabwe,has been restricted by <strong>the</strong> recent liquiditycrisis in <strong>the</strong> country’s economy. The highestoffice rents are currently recorded in suburbanbusiness parks, while <strong>the</strong> CBD continues tosee significant vacancy rates. Demand <strong>for</strong>retail space has remained relatively strong, inboth <strong>the</strong> CBD and better quality suburbanshopping centres. This has put some upwardpressure on retail rents, albeit increases arelikely to be limited by <strong>the</strong> low spending powerof much of <strong>the</strong> population.In Nairobi, Kenya, significant volumes of newoffice space have continued to be delivered to<strong>the</strong> market, most of which have been well-let.New completions in 2011 included 14Riverside, with approximately 30,000 sq m ofcommercial space. Over <strong>the</strong> longer term,<strong>the</strong>re are ambitious plans <strong>for</strong> severallarge-scale urban developments in Kenya,notably TATU City and Konza Technology City.Of Malawi’s two largest cities, Lilongwe hasseen a greater level of office developmentactivity in recent years than Blantyre, whereavailability rates are high. In <strong>the</strong> retail sector,<strong>the</strong> 18,000 sq m Gateway Mall, which will beMalawi’s largest shopping centre whencompleted, is currently under construction inLilongwe and due <strong>for</strong> completion in 2013.Occupier demand <strong>for</strong> office space in SouthAfrica was fairly subdued in 2011, and vacancyrates drifted upwards during <strong>the</strong> year in manyof <strong>the</strong> country’s major cities. While primeoffice rents were generally stable, rents <strong>for</strong>lower quality space came under downwardpressure.In Johannesburg, demand has been strongestin decentralised nodes including Illovo andSandton, and <strong>the</strong>se areas have been able tocommand higher rents than <strong>the</strong> CBD. Whilevacancy rates rose in most of Cape Town’ssubmarkets during 2011, <strong>the</strong> availability ofpremium grade space has remained low. InDurban, demand has been healthy in <strong>the</strong>Umhlanga/La Lucia Ridge area, but <strong>the</strong> CBDhas continued to record high vacancy rates.26
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