South Africa’s Commercial Real Estate Market H1 2023

Office, industrial, and hotel markets show signs of normalising, but performance varies across submarkets.

Recovery and stabilisation are evident in the office, industrial, and hotel property markets, although the progress remains selective, with certain submarkets outperforming others. Best-in-class properties are observing positive rental growth and decreased vacancies as occupiers seek upgraded spaces and property owners strategically optimise their portfolios. However, secondary nodes and aging properties face a more sluggish path to recovery. The industrial property market is heavily influenced by evolving retail trends and transforming supply chain models, while the hotel industry is gradually bouncing back with the leisure segment recovering faster than the corporate sector. Despite these positive trends, meeting rates growth that surpasses inflation continues to pose a challenge across all sectors. Amidst these changes, the market is ripe with opportunities for owners and occupiers to reimagine the utilisation of physical real estate, ushering in a new era for the industry.