After years of recovery, South Africa’s property market is entering 2026 on firmer footing.

Lower interest rates, improved infrastructure stability and a rebound in investor sentiment are reshaping where buyers are investing, and determining which asset classes are expected to outperform.

According to John Jack, CEO of Galetti Corporate Real Estate, the next phase will reward selectivity rather than scale: “2026 is about investing with intention. The opportunities are there, but they’re increasingly concentrated in specific regions and asset classes where fundamentals are strong, and demand is measurable.”

Industrial remains the anchor in Gauteng

In JHB, industrial property continues to underpin investor activity, particularly in the R10m to R40m bracket.

“The industrial sector is still the stronghold for investors in JHB,” says Cameron Smith, MD of Gauteng Broking at Galetti. “There are ongoing enquiries for tenanted industrial assets, especially where there’s potential to unlock higher rental potential by reworking, redeveloping, or upgrading properties.”

Smith notes that larger investors are looking for industrial boxes that can justify higher rentals without becoming overcapitalised: “The increase in rental needs to be market-related. Otherwise, you risk creating a white elephant in the node. That being said, there’s simply not enough quality stock, which means that most landlords are achieving their rental numbers.”

He adds that key industrial hotspots remain concentrated along major logistics corridors, particularly the N1 highway from Waterfall through Midrand and Louwlardia, as well as the eastern belt stretching from Kramerville to Pomona.

Structural reset in prime office nodes

Justin Thom, director at Galetti Corporate Real Estate, believes the recovery in office nodes such as Bryanston, Rosebank, Sandton and Umhlanga is not merely cyclical but structural.

“We are seeing a meaningful amount of older commercial office stock being withdrawn from the market through residential conversion,” says Thom. “Large vacancy pockets that once weighed heavily on these nodes are gradually being absorbed, not through leasing alone, but through repositioning and rezoning to high-density residential.”

He explains that this process, while time-intensive, is reshaping supply fundamentals. “Rezoning, planning approvals and redevelopment timelines can span 18 to 36 months, but once complete, these projects permanently remove excess office stock from the market. That naturally tightens vacancy levels and stabilises rentals in the remaining quality buildings.”

Beyond strengthening office fundamentals, Thom notes that the residential conversions serve a broader urban function.

“These developments are creating more affordable, high-density accommodation options for younger working professionals, placing them within walking distance of major employment nodes and high-quality amenities. It’s improving live-work integration in areas like Rosebank and Sandton in particular.”

He adds that this urban densification supports long-term commercial resilience: “When residential density increases around office nodes, retail follows, public infrastructure improves, and the entire ecosystem becomes more sustainable. That’s ultimately positive for both office investors and occupiers.”

Coastal regions see growth

Demand for property in coastal towns remains strong. Beyond residential demand, the Western Cape’s industrial and logistics corridors are reinforcing the province’s investment appeal. David Arton Powell, head of Cape Town Broking at Galetti, notes:

“Industrial assets in the northern suburbs continue to see strong demand, with solid value in most cases. The central industrial belt and airport precinct are also attractive, particularly for logistics operators needing efficient access to both the port and Cape Town International Airport.”

Powell adds that the decentralised office sector is also showing potential, particularly in Somerset West, Paarl and Tygervalley, driven by urban expansion into the Winelands: “These nodes offer long-term growth potential as businesses follow residential migration patterns.”

George is also evolving into a strategic regional hub. “With a growing population, an expanding airport and office demand, George is more than just a lifestyle destination,” says Powell.

Jack adds that KZN is reasserting itself as a prime coastal destination: “Investment is returning after years of uncertainty, and confidence is rebounding, supported by Durban’s strength as a logistics hub. Notably, the KZN South Coast is experiencing its strongest market confidence in over a decade.”

Issued by Jess Gois