Johannesburg’s office market is slowly emerging from a prolonged period of stress, with vacancy rates beginning to edge lower as economic conditions improve and business confidence returns.
Galetti Corporate Real Estate CEO John Jack said the city is likely to have passed the peak of the vacancy cycle, particularly in the B-grade office segment, where most of the excess space has been concentrated since the pandemic; he expects vacancies to continue to improve throughout 2026.
“We’re definitely seeing a stabilised office market and renewed take-up of space, with B-grade vacancies expected to decline as businesses grow, relocate to Johannesburg because it’s more affordable, or as entrepreneurs scale operations locally,” Jack said.
The improvement follows a period of sustained pressure. Last year, the South African Property Owners Association (Sapoa) noted in its office vacancy report that the Johannesburg metro recorded the highest overall office vacancy rate in the country, reflecting the scale of the imbalance that built up across the city’s office nodes in the years after the pandemic.
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The report also highlighted a split between building grades: prime offices led the recovery, falling 80 basis points to 6.8%, their lowest level since the vacancy peak in mid-2022. A-grade edged slightly higher to 12.2%, C-grade eased to 15.8% while B-grade remained the most pressured at 16.8%.
In the third quarter of last year, FNB’s commercial property broker survey identified greater Johannesburg as the weakest metro, citing a large oversupply across all three commercial property sectors and highlighting a continued dip in investor confidence.
Jack attributes the recovery to improving economic conditions and a gradual return of business confidence.
“When you get an underlying GDP growth rate, businesses and the whole economy grow. Effectively, the cycle starts with residential, which we’re seeing in Johannesburg, then retail as those in the houses start shopping, industrial next and lastly business, so business confidence has to rise. With GDP growth and declining interest rates, we are seeing this happen,” he said.
Some office nodes, however, are performing strongly while others remain under pressure.
“Bryanston remains strong while Rivonia and parts of Sandton are still under pressure. But Sandton is turning around due to affordability and what it has to offer. There’s a lot going on in Sandton at very good prices when compared with Rosebank, which is popular but largely taken up. Sandton is going to be an interesting one to watch,” Jack said.
He pointed out that converting offices to residential has had a significant effect in Sandton, where 60,000m²-70,000 m² of space has been repurposed, with Sunninghill also seeing substantial take-up.
“It’s largely the lower parts of Sandton, the areas on the hill, that are changing. The top parts, where it’s flat and pedestrian-friendly, are really where office activity is happening. The problem in Sandton was always the bottom areas, where rentals were cheapest. Those buildings are now being converted to residential, bringing more people into Sandton. People want to work where they live and that’s having a positive effect on the office market,” he said.
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