Johannesburg’s office space market is struggling to recover from pre-pandemic highs, with the vacancy rate in the sector approaching the 20% mark, further falling behind Cape Town, which is enjoying a purple patch.
Despite several companies pushing for a return-to-office policy, Johannesburg’s office sector appears to be struggling to fill the surplus office space, according to the SA Property Owners Association (Sapoa) office vacancy report for the first quarter of 2025.
“As of the first quarter of 2025, Johannesburg Metro remains the city with the highest overall office vacancy rate at 16.5% well above its pre-[Covid-19] pandemic level of 12.5% recorded at the end of 2019, reflecting continued challenges in absorbing excess stock across various nodes,” Sapoa said in the report.
“Cape Town Metro had the lowest vacancy rate nationally at 6.4%.”
All of Cape Town’s office nodes now have vacancy levels below those during the national peak in the second quarter of 2022 of 16.6%, signalling consistent demand and effective absorption of office space across the region.
The Durban Metro also saw improvement, with its vacancy rate dropping to 12.9%, the lowest since early 2020.
This recovery has largely been driven by better-quality stock, particularly in the prime segment, which has returned to levels last seen in 2018, according to Sapoa.
The report highlighted that Cape Town was the only metro in which all individual nodes had experienced a decline in vacancy rates since the peak.
In contrast, nodes in Gqeberha, Tshwane and Johannesburg continued to struggle with high vacancy rates, particularly in areas with older, lower-grade office stock.
“This underscores the uneven nature of the recovery, with tenant demand increasingly concentrated in select nodes and higher-quality buildings,” it is noted in the report.
The report shows vacancies increased in 21 of the 54 surveyed nodes, decreased in 22 and remained unchanged in the rest.
“While the overall office vacancy rate saw a slight uptick, performance varied across different office grades — largely reflecting shifts in tenant preferences. Occupiers continue to prioritise higher-quality spaces that better support hybrid work models,” Sapoa said in the report.
Prime-grade offices, such as Discovery’s office in Sandton, which are modern, top-tier spaces and flagship properties, have led the recovery, with vacancies dropping by 80 basis points to 6.8% — the lowest level since the peak in mid-2022.
“The prime segment’s sustained outperformance continues to reflect occupier preferences for higher-quality, better-located buildings. This demand has been supported by a narrowing rental premium between Prime and A-grade offices, making the upgrade more accessible,” reads the report.
A-grade offices, which are high-quality spaces, saw a slight increase of 20 basis points, rising to 12.2%, while B-grade vacancies, typically older buildings with modern finishes, remained unchanged at 16.8%.
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