Founder: Turnaround Talk
In July, Turnaround Talk published an article which discussed the dire situation that retail developers and rental agents are facing as offices around the country are being abandoned. Office space in the current business environment seems to be an item that many businesses can strike off their list.
This is a product of the Covid Pandemic and yet another sign of how the external environment is placing pressure on companies and is becoming a root cause of distress that many companies are struggling to address. Rental agents and property owners have been scrambling to come up with innovative ways to repurpose office space.
However, Property group Attacq is reporting that demand for office space is stable and even growing in some cases. It seems as if Mark Twain’s quote: the reports of my death have been greatly exaggerated remains true today.
Some subheadings were inserted by Turnaround Talk.
Not dead
The article points out that property group Attacq, whose main South African asset is the Waterfall City mixed-use precinct, says the office market is far from dead and that it is experiencing strong demand for space.
Not only are people returning to the office as the threat of the Covid-19 pandemic recedes, but the JSE-listed group is signing up top international companies wanting space in safe precincts.
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The article adds that, speaking to investors and journalists during a pre-close video conference call on Tuesday, CEO Jackie van Niekerk said that, looking at its precinct-focused South African portfolio, the group continued to “attract office users”.
“So, by no means is the office market dead. It’s actually alive, people are returning to the office,” said Van Niekerk.
Quality space
The article points out that she was providing the market with a year-to date update prior to the group entering a closed period on 1 January, ahead of results for the six months to end-December.
Van Niekerk said the group had also again signed a lot of international names such as Cisco, Pfizer and DP World, which owns formerly listed Imperial Logistics.
She said while it was not a case of these users taking up large amounts of space, there was definitely a trend of them looking for quality space with good safety features.
“And they [corporates and staff] are coming back to the office, which is a great thing for us.”
Precinct-focus pays off
The article points out that Michael Clampett, asset and property management executive for Attacq, said that as the group was approached by potential clients for space specifically, at its Waterfall City and Lynnwood Bridge precincts, “consolidation” was still very much a theme.
‘They may want to move out of a bigger office somewhere else and move to a smaller version in Waterfall City (for example). But I think understanding the value of an office, and what it should be used for, that is more apparent.”
Photo By: Canva
He said that in the group’s Lynwood Bridge precinct 90% of office workers “are back there”, while at Waterfall City, it was sitting at about 72% at last count.
“So that is human occupation of offices which are fairly high percentages.”
The article adds that the group’s retail performance at its assets such as Mall of Africa is also indicating that there has been a return to the office on the part of workers.
Van Niekerk said that the Black Friday promotional period has increasingly become a “Black Friday weekend and not anymore just Black Friday”.
She said footfall at the group’s Mall of Africa had been some 83 000 visitors on Friday, with a further 94 000 visitors on Saturday.
“In past history, Friday was always the busy day, so people are back at the office working, and they are shopping on Fridays. But also, they’ve got the leisure and the ability to shop over a weekend.”
