South Africa’s Commercial Property Market Shows Strong Recovery as Demand Surges and Investor Confidence Rises

South Africa’s commercial property sector is demonstrating its strongest recovery since before the pandemic, with demand now surpassing supply across industrial, office, and retail segments, according to the FNB Commercial Property Finance Q3 2025 Property Broker Survey. The industrial sector leads the rebound with pronounced undersupply, while the office market is stabilizing due to repurposing initiatives, improved affordability, and declining metropolitan vacancy rates. Retail properties also report a modest demand surplus.

Average time-on-market has shortened across all commercial segments, signaling stronger buyer engagement. Regionally, Cape Town outperforms all major metros, with demand exceeding supply across industrial, office, and retail properties. This trend is supported by semigration, rising investor confidence, and limited land availability. eThekwini and Nelson Mandela Bay also show healthy demand dynamics. Tshwane reflects a mixed picture, with industrial and retail strength offset by office oversupply, while Greater Johannesburg is experiencing oversupply across all segments.

Financial-pressure sales have dropped to 15.2 percent, their lowest level since 2019, driven by interest rate cuts and improved business sentiment. Upgrade-driven sales reached a record 24.6 percent, underscoring business expansion. Utility-related relocations have fallen sharply, from 49 percent in early 2023 to 11.5 percent, as infrastructure reliability improves. The sector’s momentum is further supported by favorable economic forecasts and South Africa’s removal from the FATF grey list, which enhances financing access and boosts foreign investment in capital-intensive real estate markets.

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