SA's commercial property sector is marked by strong performance and investment, particularly the industrial sector, which has steady rental growth and low vacancies.
According to Mordor Intelligence, a highly valued global market intelligence and advisory firm, SA’s commercial real estate market is valued at US$9.99 billion this year and projected to reach US$14.43 billion by 2030.
In its latest report, Mordor Intelligence’s key takeaways include:
- By property type, the office segment led with 38.65% revenue share in 2024; logistics is forecast to expand at a 9.63% CAGR through 2030.
- By business model, the rental segment held 73.45% of the South Africa commercial real estate market share in 2024, while the sales segment records the highest projected CAGR at 8.50% through 2030.
- By end-user, corporates and SMEs accounted for 59.67% of demand in 2024, and individual households are advancing at a 9.23% CAGR to 2030.
- By geography, Johannesburg commanded 35.67% of 2024 revenue, whereas the Rest of South Africa segment is set to grow at a 9.03% CAGR to 2030.
Types of commercial property
There are six main types of commercial property in SA:
- Office: high-rise buildings and business parks.
- Retail: shopping centres and standalone stores.
- Industrial: factories, warehouses, distribution centres (logistics).
- Hospitality: hotels and resorts.
- Mixed-use: a combination of any of the categories, including residential.
- Specialty: data centres, healthcare organisations, self-storage, agriculture, etc.
Geographic demand
Geographically, Johannesburg, Cape Town, and Durban are the areas that dominate in the commercial property sector:
Johannesburg and surrounds
The area is popular due to its capital pool and maturing technology ecosystem. Consider that Google is investing some US$1.39 billion into its cloud launch, which will inject US$2.1 billion into the local GDP and create more than 40,000 jobs. Alongside is the expansion of the Gautrain to Soweto and Cosmo City, which is estimated to add US$ 2.46 billion through construction and will lift property values near stations by an estimated three percent.
Three popular nodes:
- East Rand: for logistics companies and distribution centres, given its proximity to the OR Tambo International Airport and nearness to major highway routes.
- Midrand: As a halfway point between Johannesburg and Pretoria, this region attracts a large number of commercial and retail clients.
- Sandton: Experiences a high demand for office and retail space.
Cape Town
The appeal of this city for even small-format offices in shared-use schemes is determined by the large number of remote professionals who are also renting one-room apartments. The city also has a reputation for good governance and experiencing a boom in its e-commerce, industrial, and logistics sectors.
Three popular nodes:
- City Centre: A core business base for international and local companies, particularly those in the financial, insurance, and business sectors, as well as those in technology, the green economy, and fashion & design.
- Epping: Considered the largest and most central industrial area in the region, with easy accessibility to major roadways and public transport.
- Century City: A large mixed-use development offering office spaces and business facilities.
Durban
This region’s port upgrades and industrial land developments are attracting a large percentage of light-manufacturing tenants, especially in the Richards Bay Industrial Development Zone and the Dube TradePort. Coastal areas like Umhlanga and Ballito are considered hotspots for mixed-use developments.
Three popular nodes:
- City Centre: This is the commercial hub of Durban, popular with finance, legal, and transport companies.
- The Northern Corridor: Comprising Umhlanga, La Lucia, and Cornelia, this rapidly developing area presents mixed-use developments and precincts, boasts advanced infrastructure, and is within easy reach of the King Shaka International Airport.
- The Southern Basin: This area is known for its supportive mineral processing, storage, and manufacturing industries. It is connected to the N2 business corridor and is well-known for its large logistics and distribution precincts.
Port Elizabeth/Gqeberha
This city is known as an anchor for automotive manufacturers and is cited for logistics park expansion. Infrastructure projects like the Coega Special Economic Zone (SEZ) attract industrial and logistics investors, and central locations like Walmer and Humewood present a number of mixed-use developments.
Three popular nodes:
- Central: This is a historical business center, sited close to major transport arteries like the N2. As a major commercial zone, this area houses a large concentration of office and retail businesses.
- Industrial estates: Catering to industrial specialisation businesses—and their supply chains—such as automotive, chemical, food processing, and metal.
- SEZ: With over 9 000 hectares of land, SEZ is the largest commercial property zone in the region, dedicated to industrial and commercial development.
Key market players
With solid reputations for their commercial property activity are Growthpoint, Amdec, Pam Golding Commercial, Amdec Group, API Property Group, Orion Group, and Knight Frank. Atterbury, Currie Group, and Equites are hailed for their industrial and logistics developments, and Excellerate JHI and Broll Property Group are highlighted for their property services, including management.
