TRENDS IN OFFICE RENTAL

Abstract

The development of office space is concentrated in the Central Area. A close study of the rentals of these offices cover a period of four years is attempted in this dissertation. There has been an overwhelming demand for office space, from undersupply. However, by the year 1985 new construction is likely to cause an oversupply. This will lead to a buyers or renters market. Developers will then have to consider where to build and what attracts tenants. An analysis of the past and present rental trends in the economy shows the influence of the undersupply. Data collected from rentals of offices between the years 1978 and 1981 has been statistically analysed to find the influence of locality on the office rents in buildings. A further analysis on the size of tenants and its effects on rentals was undertaken, which confirmed that the rental distribution in the form of a multiple nuclei approach is correct. However, the effect of size on rentals is influenced by other *factors in each building. The tenant's occupation is an important factor affecting rents in buildings. Due to the close proximity and identical provision of services, the final determinant on the ability of the buildings to command high rental depends on the management's ability to draw •prestigous' tenants. These tenants will ensure the stability and contribute to the prestige of the buildi and thereby draw others who are willing to pay more for the office space.