Diketseng Maleke|published
After years of recovery, South Africa's property market Galletti is entering 2026 with new confidence, says John Jack, CEO of Corporate Real Estate.
He says low interest rates, improving infrastructure stability, and a rebound in investor sentiment are reshaping where buyers are investing and determining which asset classes are expected to outperform.
The 2025 Road Report on the South African property market reinforces this momentum, stating that industrial property remains the most resilient sector across the country, while office markets are undergoing structural change through transformation. The report highlights that coastal regions, particularly the Western Cape and KwaZulu-Natal, are outperforming the national average in both rental growth and investor confidence.
According to Jack, the next phase will reward selectivity rather than scale: “2026 is about investing with intention. Opportunities exist, but they are increasingly concentrated in specific sectors and asset classes where fundamentals are strong, and demand is measurable.”
Industrial anchor remains in Gauteng
In Johannesburg, industrial property is driving investor activity, particularly in the R10- to R40-million category, according to Cameron Smith, managing director of Gauteng Broking at Galetti.
“The industrial sector in Johannesburg is still a stronghold for investors. Inquiries are ongoing for tenancy-owned industrial assets, particularly where reworking, redeveloping or upgrading properties has the potential to unlock higher rental potential,” says Smith.
Smith warns that larger investors are looking for a balance: “Rent growth needs to be market-related. Otherwise, you risk creating a white elephant in the node. That being said, there is not enough quality stock, which means most landlords are achieving their rental numbers.”
Smith says the key industrial hotspots are concentrated on key logistics corridors, particularly the N1 highway from Waterfall through Midrand and Loulouardia, as well as the eastern belt stretching from Cranmerville to Pomona.
Structural reset in prime office nodes
Justin Thom, director of Galetti Corporate Real Estate, believes the recovery in office nodes such as Bryanston, Rosebank, Sandton and Umhlanga is structural rather than cyclical.
“We are seeing a large amount of older commercial office stock being withdrawn from the market through residential conversion,” says Thom. “The large spaces that once dominated these nodes are gradually being absorbed, not through leasing alone, but through rezoning and rezoning into high-density residential,” says Thom.
This process, while time-intensive, is reshaping the fundamentals of supply. He says the timeline for rezoning and redevelopment can last 18 to 36 months, but once completed, they permanently remove excess office stock from the market, tightening vacancy levels and stabilizing rents.
In addition to strengthening office fundamentals, Thom says residential conversion serves a broader urban function: “These developments are creating more affordable, higher-density housing options for young working professionals, placing them within walking distance of key employment nodes and high-quality amenities. This is particularly improving live-work integration in areas such as Rosebank and Sandton.”
Coastal areas are seeing an increase
demand for Property Remains strong in coastal cities. In the Western Cape, industrial and logistics corridors continue to reinforce the investment appeal of the province.
“Industrial assets in the northern suburbs are seeing strong demand, with solid value in most cases. The central industrial belt and airport precincts are also attractive, particularly for logistics operators requiring efficient access to both the port and Cape Town International Airport,” says David Arton Powell, head of Cape Town broking at Galetti.
Powell says decentralized office nodes in Somerset West, Paarl and Tigervalley are showing potential, inspired by urban expansion in the Winelands: “These nodes offer long-term growth potential as businesses follow residential migration patterns, Powell says.
George is also developing as a strategic regional centre. “With a growing population, expanding airport and office demand, George is more than just a lifestyle destination,” says Powell.
Jack says KwaZulu-Natal is re-establishing itself as a leading coastal destination: “Investment is returning after years of uncertainty, and confidence is rising again, supported by Durban's strength as a logistics hub. In particular, the KwaZulu-Natal South Coast is experiencing its strongest market confidence in more than a decade.”
Looking for Dubai's offshore area
South African investors are also turning their sights abroad, with Dubai emerging as a major destination.
Jack says transaction volume has increased from approximately 200,000 annually to approximately 270,000, with the total transaction value reaching approximately AED 680 billion. “This level of activity will only continue into 2026 and beyond, and traditional sales methods may struggle to keep pace. That is why we believe auctions will play an increasing role in how property is traded in high-demand markets such as Dubai, giving South Africans direct access to this investment potential.”
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