Cape Town Commercial Property Market Insights

Office Market

Industrial Market

Retail Market

1. Industrial Sector: A Seller's Market

The logistics and industrial segment remains the clearest structural growth story. Growthpoint reported logistics & industrial vacancies of just 3.3% at December 2025, with Western Cape rental renewal growth of +7.3%: demand for modern logistics space continues to outstrip supply.

• Western Cape rental renewal growth: +7.3% (Growthpoint HY26)
• Logistics & industrial vacancy: 3.3% at Dec 2025
• Montague Gardens: R135m Phase 2 redevelopment at 7 Chain Avenue (Apr 2026)
• Group capital expenditure concentrated in Western Cape logistics

2. CBD Revival: Portside Towers Transaction

One of the most significant office transactions of the past year was the R580m acquisition of Portside Towersby the Cavaleros Group, announced in April 2025, recommended for approval (with conditions) by the Competition Commission in August 2025, and completed in December 2025. The deal signals renewed institutional confidence in the CBD, even as headline CBD vacancy now sits above the metro average.

• Portside: Cape Town's tallest building, 5-Star Green Star rated
• Effectively fully let with blue-chip tenants including FNB
• Cape Town CBD office vacancy 11.4% (Q1 2026), above the 6.0% metro average
• CBD median asking office rent around R154/m² (Q1 2026, publicly reported)

3. Decentralized Nodes Dominate

Century City and Tyger Valley continue to command the highest rentals and lowest vacancies, with decentralised Cape Town office vacancy at just 2.7% (Q1 2026), well below the CBD. Inbound commuter visits have recovered to near pre-pandemic levels, driven by the lifestyle integration of these managed precincts.

• Median asking office rents (Q1 2026, publicly reported): V&A Waterfront R320/m², Claremont R214/m², Century City R197/m², CBD R154/m²
• Century City and V&A office nodes among the tightest, near 1.7% and 0.4% vacancy
• Flight to quality intensifying, with B/C-grade stock stagnating
• Energy security a non-negotiable valuation metric

4. Retail: Premium & Dominant Formats Outperform

Premium and dominant retail formats continue to outperform. Growthpoint's V&A Waterfront drew 25 million visitors in 2025 with retail sales above R11bn and vacancy of just 0.3%, while Hyprop's HY2026 disclosure showed SA trading density up 7.5%, retail vacancy down to 3.1%, and tenant turnover up 5.0%.

• V&A Waterfront: 0.3% vacancy, 25m visitors, R11bn+ retail sales (2025)
• Hyprop SA portfolio: retail vacancy down to 3.1% (Dec 2025)
• Canal Walk: 96.1% occupancy, ~18m annual visitors
• Trading density +7.5%, tenant turnover +5.0%; experience- and convenience-led retail resilient

Cavaleros Group acquired Accelerate Property Fund's roughly 50% stake in Cape Town's tallest building. The disposal was announced in April 2025, received the Competition Commission's recommendation (with conditions) in August 2025, and completed in December 2025. This 5-Star Green Star rated asset is anchored by FNB and effectively fully let, a bellwether for institutional confidence in the CBD.

A major mixed-use development including around 14,000m² of P-grade office space, a hotel, and residential units. Completion is targeted for early 2028, demonstrating continued appetite for premium Cape Town development.

Opportunities

• Prime Logistics: 3.3% vacancy (Dec 2025), +7.3% WC rental renewal growth, among the tightest nationally
• Emerging Industrial Nodes: Fisantekraal and Blackheath offer development opportunities
• CBD Conversions: Adaptive reuse of older office to residential/mixed-use (The Rubik, Mama Shelter model)
• Decentralized Grade-A: Century City, Tyger Valley commanding premiums with lowest vacancies
• Premium Retail: V&A 0.3% vacancy, R11bn+ sales; Hyprop trading density +7.5%

Risks

• Energy: National load shedding suspended (one year clear as of May 2026), but localised municipal load reduction and grid constraints persist, so backup power remains a valuation differentiator
• B/C-Grade Office: Structural vacancy as tenants flee to quality; stagnation risk
• Industrial Land Scarcity: Rising land values may compress development yields
• Global Geopolitics: Export hub sensitive to trade disruptions and tariff changes
• Secondary Retail: Continues to face pressure from e-commerce and weaker footfall

Spear REIT

The only regionally focused REIT reported full-year FY2026 results:

• DIPS & DPS growth: +6.02%
• Portfolio value: R7.18bn
• Occupancy: 97.28%
• Collections: 99.33%
• Acquisitions: R1.07bn

Growthpoint

Signaled strategic intent to increase Western Cape exposure:

• Focus: Logistics and retail assets
• Arterial Industrial Estate Phase 2: ~21,800m² (delivered)
• Disposing non-core office assets elsewhere