Commercial real estate trends for South Africa in 2026
The commercial real estate sector is now better positioned than at any time in recent years.
2025 proved to be a strong year for South Africa’s commercial property sector, with gains recorded across industrial, retail, and office nodes.
“The commercial real estate sector is now better positioned than at any time in recent years,” says John Jack, CEO of Galetti Corporate Real Estate. “2026 presents an opportunity to capitalise on renewed investor confidence and asset availability.”
The latest Q3 2025 data from the Rode Report confirms improving vacancy rates and rental growth in core markets. Jack notes that auctions are increasingly embraced as a preferred sales method, while the country’s resilient REITs delivered solid returns, underscoring real estate’s appeal as a value-driven investment class.
Building on this momentum, Jack highlighted the key trends to watch in the commercial property sector in 2026:
- South Africa’s REITs Continue to Outperform
“South Africa’s REIT sector is entering 2026 on a strong footing, supported by stabilising valuations, healthier balance sheets and improving operational performance,” says Jack.
The latest Rode Report shows industrial vacancies remain below 5%, retail vacancies continue to decline in leading portfolios, and most listed REITs delivered double-digit total returns in 2025.
“This renewed momentum will likely take centre stage at the SA REIT Conference 2026 in Johannesburg, where global and local experts will unpack emerging investment opportunities,” he said.
- Office Sector Strengthens
“The retreat from fully remote working, coupled with improved business confidence, has seen South Africa’s office sector continue its gradual recovery,” says Jack.
“Cape Town remains the standout performer, while Johannesburg faces the most pressure. However, the conversions of older stock are helping restore market balance,” he explained. “Well-located office assets are likely to see sustained interest.”
- Resilience in the Industrial Sector
Industrial real estate is expected to remain South Africa’s strongest commercial asset class in 2026, Jack notes, supported by persistently low vacancies, rising logistics demand and the ongoing expansion of e-commerce.
National industrial vacancies are holding at 3.8% – according to Rode’s Q3 2025 survey – while rentals for 500m² space grew 8.4% year-on-year.
“Strategic proximity to transport corridors and further demand for distribution centres continue to drive performance, particularly in Cape Town, where demand significantly outweighs supply,” says Jack.
- Major Players Investing in the Commercial Sector
“Major developers are accelerating investment as confidence strengthens across the commercial property market,” says Jack.
Growthpoint’s R20b V&A Waterfront expansion highlights this momentum, as does its investments in projects at La Lucia Mall, Durban (R24.3m), Longbeach Mall, Noordhoek, Cape Town (R17.6m), Beacon Bay Retail Park, East London (R16.1m), and Alberton City, Johannesburg (R10.8m).
In township and rural markets, Vukile Property Fund and Exemplar continue to post strong trading-density gains and lower vacancies, driven by resilient consumer demand.
“The strong demand is supported by improved business confidence alongside South Africa’s grey-list exit,” says Jack. “New entrants, including Walmart’s branded-store rollout in Joburg, further signal long-term investor commitment heading into 2026.”
- Tech Transforms Client Interactions
Jack says technology is rapidly transforming how properties are being marketed and sold, with commercial real estate likely to enter the digital shift.
“Social media platforms are driving demand through short-form videos, walk-throughs and emerging property personalities, with many listings going viral before reaching traditional portals,” explains Jack.
“AI is accelerating this evolution, enabling instant valuations and personalised marketing. As decision-makers become more digitally driven, these tools are set to redefine how commercial properties attract interest and transact.”
In conclusion, Jack says the trends shaping 2026 signal a redefined commercial property landscape: “Strengthening fundamentals, renewed investor activity and rapid technological adoption are creating a market that better aligns with global shifts. For stakeholders across the value chain, the year ahead represents a pivotal opportunity to move early and unlock long-term value.”
Issued by Jess Gois
