After the Bell: Parking the office

I don’t know if you are one of those productive people who, like me, do the morning dash into an office somewhere, or one of those, um, uh, less-productive people who do everything from home.

I mean, I get the convenience of home, but in the end I think companies that succeed in most fields are those that get people into an office.

But one of the most fascinating changes over the past few years has been how office parks are developing, and the way in which they are changing our cities.

I’m not the most observant chap, but even I can see that the centre of financial gravity in Gauteng has shifted slightly from Sandton.

It’s still there, and Sandton City itself is a massive draw, as are all of the law firms. But I still sense it’s not quite the centre it was before the pandemic.

Growthpoint CEO Estienne de Klerk, who manages a huge amount of office space in Sandton, told me on The Money Show last night that in Gauteng their vacancies peaked at 22% during the pandemic, and they’ve been able to bring that down quite substantially.

Still, 13.7% of their spaces in Gauteng are empty.

Over in Waterfall, Midrand, Attacq says their huge new development is pretty much full.

Now, to be fair, they’re using a demand model, they’ve only been building when they’ve already had clients for that space. Even so, their chief financial officer, Peter de Villiers, said on Tuesday night that spaces they do have without clients are filling up quite quickly.

You might immediately think Sandton is dying and Waterfall is booming. But it’s probably not that at all. It’s more likely that up-and-coming firms, looking for a precinct-style property, are keen on Waterfall, while slightly older, more established “blue chip” firms are keen on Sandton.

And if you already have a nice place in Sandton it will take a lot to make you give it up, while if you’re newer, a move to Waterfall is easier.

If you are the CEO of a company, or just in charge of deciding where your headquarters and offices are going to be, I’m sure at some point your major thought process is going to be: “But what about the council?”

Interestingly, both Attacq and Growthpoint say this is probably one of the reasons for the big move towards precincts.

As a CEO, you want to pay a monthly fee and not have to think about it. You really don’t want problems around water and electricity and rubbish on your desk (or in your WhatsApp).

For that alone you’ll be prepared to pay over the odds.

You can imagine how, particularly in Gauteng, that’s a major driver towards this kind of precinct development.

But it’s not just there.

Growthpoint has consistently said over the past few years that demand for similar services is huge in Durban. The developments around Umhlanga are huge, and still growing.

I can’t blame any of the CEOs who make that choice, or the companies servicing that demand. They are growing the economy, providing a service and, in their own way, making life better for everyone.

I do worry though that it is yet another tenuous link that connects us to other people that is being severed.

The only people you will see on the streets of this precinct will be people like yourself. You won’t see other people.

I notice this when I go to the City Bowl of Cape Town (also spelt “Bowel” during periods of peak, blocked traffic).

It was a South African friend who spends a lot of time in European capitals and London who told me that only there do you see middle-class South Africans walking around.

I do think you see it in one other place – those small nodes around Gautrain stations, where people emerge from the train and walk into an office.

It’s a bit like the difference between using public transport in richer places and driving your own car. In your own car, it’s just you or your family or a friend. In public transport it’s everybody.

And when you are working, and perhaps living, in a precinct, well, it’s easier to forget about other people.

That said, when my children start working (hopefully, considering how difficult it is for young people to find a job), I’ll probably say a silent prayer that they are working in a place like that every day.

When this kind of development starts, it won’t stop. It’s just what will happen. We will get used to it very quickly. And any more council failures will just speed it up.

And those days of walking with your colleagues from the office to that nice coffee shop for the HR person, and that awfully expensive, stupidly fancy place for the salesperson and the slightly nasty chicken outlet for the IT person, will come to an end. DM