Johannesburg at a glance
Johannesburg Rental Overview
The Johannesburg office market remains under pressure with the vacancy rate slightly increasing to 12.9% in Q1 2018 compared to 12.6% in the previous quarter. This is the highest vacancy rate recorded since 2010, further emphasising pressure in the market. While Grade P office accommodation has the lowest vacancy rate at 5.4%, it has witnessed a significant increase of 2.7% compared to the same period in 2017. The inner city and surrounding areas continue to exert the most pressure on the overall vacancy rate.
Despite the high vacancy rate, Johannesburg continues to be the first-choice location for many corporates as there is continued developer interest in the city. However, development activity continues to be saturated around the Sandton, Rosebank and Waterfall nodes which respectively account for 37.0%, 27.0% and 25.0% of the city’s development pipeline.
Rental growth across all grades has slowed down compared to the same period in 2017. Average rentals for Grade P and Grade B property saw a 2.3% and 2.4% growth in Q1 2018 compared to 7.4% (for both) in the same period last year, while Grade A accommodation saw some rental reversion by 1.3% in Q1 2018.
There continues to be a shift, from both developers and occupiers, towards high-quality office accommodation which is seen in the rapid growth (24.9%) and low vacancy rate of Grade P stock