WESTERN CAPE RENTALS

Tenant demand in the Western Cape continues its
positive trajectory, reverting back to historically-low
levels last seen in 2016 and 2017.

After peaking at 14.38% in Q2 of 2021, the province’s
vacancy rate reduced from 11.4% in Q4 of 2021 to 2.9%
in Q1 of 2022.

The slower rate of recovery is being exacerbated by the
fact that commercial real estate remains under pressure
leading to a higher rate of office buildings and complexes
being converted into rental housing accommodation.
Encouragingly, negative rental escalations that have
been a trend in the province for the past five consecutive
quarters are back in positive territory.

Rental escalations have been under pressure in the
Western Cape since 2019. Interestingly, the Western
Cape was one of the only two provinces that experienced
de-escalation for the more than four consecutive
quarters from Q3 in 2020 to Q2 2021. However, in Q1
of 2022, rental escalations are back in positive territory
at 2.74%.

TPN Vacancy Survey