Understanding South Africa’s Office Grading System:
A Guide for Tenants in Cape Town
One of the most confusing concepts you’ll come across in the commercial property market – be it office rentals in Cape Town or anywhere else in the country – is the office grading system. Knowing your Grade A, Grade B, and Premium Grade from each other is essential for a successful property search, but what do they actually mean?
In this article we break down the South African office grading system to help you make informed leasing decisions, especially with the tight market in office and light industrial spaces in Cape Town.
How the Property Grading System Works
Like so many things, commercial property prices follow the maxim that “you get what you pay for”. The office grading system provides a consistent way to describe the quality and characteristics of a commercial building and provides a guide to the type of office space you’ll get at every price point.
While the categories can overlap in terms of amenities and desirable features, the system provides a useful way to categorise and describe commercial properties.
Property grading systems were introduced to help investors, developers, landlords, and tenants speak a common language. The system used in SA is based on international standards but tailored to the needs of our market.
The various grades typically follow this flow:
• Premium or AAA Grade
• Grade A
• Grade B
• Grade C
If every agent and tenant only used these terms, the system would be simple to navigate. But you might also see variations in the terms that are used to describe office space.
AAA grade is sometimes used interchangeably with Premium, and Class A, B, and C may also be mentioned. These are especially confusing because Grade A and Class A don’t equate to the same quality of property. Let’s take a closer look at the various levels and what they represent.
Premium/AAA Grade (Class A)
Typical tenants: Multinational firms, financial institutions, law firms, tech companies, or any business where corporate image and high-end amenities matter.
Rental range: R200–R250/m² per month (excluding VAT)
Defining features:
• Brand-new or recently constructed buildings
• Prime locations, such as the Cape Town CBD, Century City, or V&A Waterfront
• Modern architectural design and state-of-the-art finishes
• High-rise or secure office park setting
• Excellent natural light, energy-efficient features, and superior ventilation
• Professional security, biometric access, and backup power
• High parking ratios and ease of access
Premium Grade offices never fail to impress. These buildings are often LEED- or Green Star-rated and cater to companies willing to pay a premium for prestige, functionality, and sustainability. They’re best suited to tenants prioritising employee wellness, environmental impact, and client-facing professionalism. In exchange for all of this, they command a premium rental price.
Grade A (Class B)
Typical tenants: Established SMEs, consultancies, regional branches of larger firms.
Rental range: R160–R200/m² per month
Defining features:
• Buildings usually 5–10 years old but still modern and well-maintained
• Located in business hubs like Claremont, the CBD, or Bellville among others
• Good-quality finishes and secure office parks
• Air conditioning, elevators, and good connectivity
• Professional building management and standard compliance
Grade A offices in Cape Town strike a balance between cost and quality. While they may not have all the cutting-edge features of a premium building, they still offer a professional, comfortable environment for daily operations and client meetings. These spaces are ideal for companies that want to maintain a professional image without overloading their overheads.
It’s important to note the difference in naming between Grade A and Class B. Though they may have different names, they refer to the same category of property. The same pattern will continue as we move to Grades B and C below.
Grade B (Class C)
Typical tenants: Startups, NGOs, training centres, call centres, and government contractors.
Rental range: R120–R160/m² per month
Defining features:
• Buildings typically over 10 years old
• Slightly older architectural style or interior finishes
• Often located on the periphery of central business districts
• Basic services like air conditioning may be retrofitted or less efficient
• Lower parking ratios and limited amenities
Grade B space can offer good value for budget-conscious Cape Town office rentals. Renovations can bring these buildings up to on-trend standards, and owners should be sure to focus on long-term maintenance and digital functionality like reliable fast internet.
Grade C
Typical tenants: Storage facilities, creative studios, startups, and informal offices.
Rental range: R90–R120/m² per month.
Defining features:
• Buildings older than 50 years
• May not have dedicated parking or high-tech security systems
• Located in fringe areas, mixed-use zones, or converted residential buildings
Grade C properties may be in need of major refurbishment but can be a great fit for niche tenants looking for large, affordable spaces in the surrounding suburbs of Cape Town. Artists, warehousing operations, or NGOs might find these locations practical and cost-effective. They also won’t add unnecessary financial burden to the operations of smaller businesses and cost-conscious nonprofit entities.
Do Light Industrial and Mixed-Use Spaces use the same Ratings?
For tenants looking at warehouse or industrial facilities with potential for conversion into office space, rental rates tend to fall between R60–R100/m². These properties are usually located in semi-commercial zones like Paarden Eiland, Montague Gardens, or Epping.
While not part of the traditional grading system, these buildings are often assessed on:
• Ceiling height and loading access
• Yard space and turning circle
• Office-to-warehouse ratio
• Zoning and permit compliance
Not every building will have an official rating, but an experienced estate agent will be able to assess the premises immediately through a process of inspection. This is one of the many skills that come with years of industry experience, and our commercial team’s combined decades of excellence in the industry means that they’ll be able to match your business with the ideal commercial property that suits your needs precisely.
Why Office Grades Make a Difference in the Rental Process
Is it really necessary to know the grade of office space you’re seeking or use it as a search criterion?
While knowing what type of premises you’d prefer in a general sense – taking factors like amenities, appearance, and location into consideration – can certainly help you make a final rental decision, choosing the right office grade isn’t just about aesthetics or balancing your budgets.
Here are some of the aspects of your business that can be affected by the grade of property that you end up choosing.
1. Staff Morale & Productivity
A well-lit, modern office with good air quality and ergonomic layouts contributes to happier, more productive teams.
2. Client Impressions
Your office is often your first impression. Grade A or Premium spaces signal professionalism and success, which can be valuable in client-heavy industries.
3. Long-Term Costs
While lower-grade offices may be cheaper upfront, you might pay more in utilities, maintenance, or retrofit costs later on.
4. Regulatory Compliance
Higher-grade buildings are more likely to comply with modern fire safety, accessibility, and energy regulations. Always confirm certifications and ensure compliance if you’re leasing lower-grade premises.
Cape Town Market Trends: What Grades do Tenants Gravitate Towards?
In Cape Town, demand for well-located Grade A and Premium space remains strong. This is especially true in areas like Century City and the V&A Waterfront. Meanwhile, some companies are opting for B or C grade offices to save costs or accommodate to the low vacancy rates and high demand in the market.
With the growing importance of ESG (Environmental, Social, and Governance) factors, many firms now prefer green-certified buildings, even at a premium. All of these factors make it essential to assess the grade of a prospective building and keep the grading system in mind when you deal with agents and landlords.
Get the Right Building Grade: Questions to Ask Before Signing a Lease
If you’re not sure what grade an office building falls under, your rental agent should be able to obtain the information for you without much trouble. However, some buildings may have features that make them hard to classify. When in doubt, you can always ask the following questions:
- What grade is the building officially classified as?
- When was it last renovated?
- What is included in the rental rate?
- Is the building compliant with current regulations?
- Are there backup power and water systems?
- What is the parking ratio?
- Are there security and access control systems?
Let us Take the Confusion out of Building Grades
Understanding the office grading system is useful when evaluating commercial space, but it’s not the only thing to bear in mind. The grade may give you a good overview of building quality, but it’s essential to always view the property in person, compare value per square meter, and consider location, amenities, and your company’s needs before signing a lease.
That’s where our team’s extensive experience can be a game changer for your company’s location strategy.
Whether you’re scaling up your Cape Town business, semigrating, or streamlining, the right space can support your business growth for years to come.
We are ready to match your business with the ideal office space at the best grade to suit your needs. Contact us today to get started.
