South Africa's property sector is entering a new phase of sustained growth, with mixed-use developments leading the way and outperforming broader market trends.
Source:Supplied. Thabo Twalo, Chief Underwriting Officer at Santam.
This momentum is expected to continue through 2026, driven by migration, international demand and a supportive interest rate environment. Yet as these integrated live-work-play complexes expand, so does the complexity of risk management. From established centers such as Century City and Melrose Arch to emerging developments, body corporates face increasing regulatory, financial and environmental pressures – making the choice of an insurance partner more important than ever.
Commenting on this, Centum Chief Underwriting Officer Thabo Twalo says the mixed-use, sectional schemes offer an attractive mix of residential, commercial and recreational areas within the same development. “This creates a vibrant and dynamic space that offers security, convenience and low maintenance costs,” says Twalo.
He points to examples such as Century City, Cape Town's central business district, Tiger Waterfront and the V&A Waterfront Marina, which have seen prices soar with double-digit annual growth.
Young buyers want convenience
Beyond convenience, safety has become a key driver of young buyers' preference for mixed-use living. Centralized access controls, on-site monitoring and managed campus environments provide a level of security and connectivity that closely matches the expectations of young urban homeowners.
Despite rising prices in the sector, Absa's latest Homeowner Sentiment Index (HSI) for the fourth quarter of 2025 indicated that younger survey respondents (under age 44) were far more confident than their senior counterparts (over 55).
According to Twalo, South African Deeds Office data supports this – showing that young home owners account for half of all property purchases.
He says this younger demographic of buyers supports the growth of mixed-use, sectional=title developments, where lifestyle options, convenience, security and value are paramount.
Complex cover for multidimensional entities
Modern mixed-use schemes often extend far beyond residential units, to include retail, offices, hotels and shared public facilities within the same complex. These diverse uses rely on common infrastructure and governance structures, which can complicate insurance responsibility when incidents occur and reinforce the need for clearly defined cover and specialist expertise.
As the popularity of the area grows, Twalo warns that it is important for owners and tenants to understand the intricacies of insurance claims for these types of properties.
“When something goes wrong with a sectional title – the roof leaks, the floor cracks, a geyser erupts or a small fire occurs – who is responsible for fixing the damage?”
With so many stakeholders involved, he says ownership of issues can become 'blurred', creating tension between trustees, owners and occupants.
what to do when something goes wrong
Higher density designs and shared building services mean claims can rise rapidly in mixed-use developments. Centralized plumbing, electrical systems and vertical construction increase the likelihood that water, fire or structural damage will affect multiple units or tenants simultaneously, especially as climate-related weather events intensify.
According to Twalo, the most common causes of sectional-title insurance claims are geyser-related issues, as well as storm damage. “With the increasing impacts of water scarcity and climate change, claims for these types of issues are only likely to increase.”
He explains that a body corporate will usually have adequate cover for all buildings within the sectional-title scheme – whether individual dwelling units or the common property area – depending on the policy. “This means that if the roof of your unit is damaged due to extreme wind conditions, body-corporate insurance pays for the repairs,” says Twalo.
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“However, as the owner, you are responsible for initiating a claim through the body corporate,” says Twalo. When it comes to tenant claims, he says the claim has to go through the unit owner, before being taken to the body corporate for processing. “This must be signed by a trustee or managing agent. Owners should never claim directly from insurers. If there is any excess outstanding, according to the Sectional Title Act in South Africa, the owner is responsible for paying it,” says Twalo.
Importantly, he says, sectional-title insurance cover only extends to residential schemes and the 'brick and mortar' portion of the common property, not movable contents. “These should be insured by section owners or their tenants,” he says.
Well-located mixed-use developments typically benefit from strong property-price growth, driven by foot traffic, tenant diversity and continued infrastructure investment. As the value increases, regular revaluation of the sum assured becomes important, as stable valuations rapidly appreciate the sum insured.
Finally, Twalo points out that sectional-title unit owners are entitled to transparency in terms of appraisal figures. “As a section owner, you can ask for the insured value of your property and request that it be increased (usually at the annual general meeting). This request should come with a recommendation to the trustees to check that the value of the whole building is correct. Body-corporate rules require that a scheme never be under-insured,” explains Twalo.
What to look for in a real estate insurer?
Insuring mixed-use developments requires an in-depth understanding of operational and emerging risks, including security systems, digitally managed access controls and risks related to cyber exposure. Insurers with specific mixed-use experience are better placed to support trustees with mitigation, policy structuring and efficient claims handling.
When it comes to real-estate insurance, body corporates should choose an insurer with a strong track record and in-depth knowledge of the complex regulatory environment. “Spending time understanding the insurer's claims-payment history is a good place to start. You want an insurer with a good track record when it comes to paying claims.”
It is also important to be a subject matter expert. Twalo says body corporates should not only look for an insurer with a deep understanding of the legal and regulatory framework, but also one that adds value as a trusted advisor rather than merely acting as a claims intermediary. “This extends to their approach to emerging risks such as cyber risk and climate change in the real-estate market,” says Twalo.
He further said that their product suite needs to be innovative and adaptive in response to this evolving environment.
Twalo concluded that a corporate body should look for an insurance partner, not just a provider. “As South Africa’s property sector continues to grow and expand, it is important for body corporates to work with an insurer that provides solid technical and financial support, as well as a forward-looking approach to the evolving real estate risk landscape.”