Wednesday, 15 October 2025
South Africa’s two largest office markets are taking different paths through 2025. Cape Town continues to attract steady demand for premium office space, while Johannesburg’s recovery remains uneven, weighed down by older buildings and slower tenant expansion.
Recent market data show that national office vacancy has fallen to its lowest level since the pandemic, with roughly one in eight square metres now empty. The improvement is led by Cape Town, where prime business districts are nearly fully occupied and rents have held firm. Developers there report that new projects are being pre-let well ahead of completion, reflecting sustained demand from finance, professional services and creative industries that prioritise reliable infrastructure and energy stability.
Johannesburg tells a more complex story. Premium properties in Sandton and Rosebank are leasing steadily, but older central buildings continue to struggle. Many owners are repositioning assets through refurbishment or conversion to residential use. Despite these challenges, leasing volumes have picked up modestly in 2025, supported by gradual economic stabilisation and a focus on energy-efficient upgrades.
Across both cities, the preference for high-quality, decentralised offices remains clear. Prime-grade space now represents the healthiest segment of the market, with occupancy around mid-single-digit vacancy levels. Analysts note that investment yields have been broadly stable this year, sitting near the 9 percent range, suggesting that investors are regaining confidence in well-located assets.
The market outlook for 2026 points to slow but consistent improvement. As financing costs ease and more companies encourage regular office attendance, both Cape Town and Johannesburg could see firmer absorption. Yet while Cape Town benefits from a shortage of new supply, Johannesburg’s challenge is to adapt its large stock of secondary offices to new standards of efficiency and resilience.
Taken together, the South African office sector in 2025 is no longer in crisis, but in transition — defined by selective recovery, disciplined investment, and a clear divide between the country’s two commercial capitals.
