South Africa Commercial Real Estate Market Size (2024 - 2029)

Commercial Real Estate South Africa Market Analysis

The South Africa Commercial Real Estate Market size is estimated at USD 9.28 billion in 2024, and is expected to reach USD 13.49 billion by 2029, growing at a CAGR of 7.63% during the forecast period (2024-2029).

The office market in Durban moved from the traditional central business district (CBD) to the uMhlanga, La Lucia, and Ballito neighborhoods in recent years, as per experts. Its commercial real estate market has had to contend with harsh externalities over the past few years, above the impact of the COVID-19 pandemic, resulting in increased operational risk for businesses based in the country. Nevertheless, the BPO industry has been given an advantageous environment due to its robust labor market and relative affordability in the office industry.

On the other side, most urban centers are demanding affordable residential housing. Since many of these pre-existing commercial buildings have services, repurposing them is generally simple and inexpensive. This tendency is already well established in many cities, and as more offices fall empty in the upcoming months and years, it will pick up speed.

Aside from saving money, repurposing a building also eases the burden on governments, which are already under strain to provide services and utilities. The fact that these converted buildings are already situated within cities further reduces the need for inhabitants to commute, decreasing traffic and the strain on public transportation infrastructure.

While the global economy is putting pressure on investors in most domestic real estate market segments, Makhosini Ndlovu, product head at FNB Commercial Property Finance, claims that those investing in student housing continue to see strong returns.

Yields remain very good for some universities, such as the University of Cape Town (UCT). Regardless of how many approvals are given for the construction of student housing near UCT, domestic and international demand for study opportunities will likely maintain demand for housing in the upcoming years.

Commercial Real Estate South Africa Industry Segmentation

Commercial real estate (CRE) is only used for business-related activities or to offer a workspace, as opposed to being utilized as a residence, which would fall under the residential real estate market. Most frequently, renters lease commercial real estate to conduct businesses that generate cash. A complete background analysis of the South African commercial real estate market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report.

The South African commercial real estate market is segmented by type (office, retail, industrial and logistics, and hospitality) and key cities (Johannesburg, Cape Town, Durban, Port Elizabeth, and Other Key Cities). The report offers market sizes and forecasts for all the above segments in value (USD).