Decentralised office nodes are firmly overtaking traditional CBDs as occupiers abandon historically prestigious but congested city centres in favour of locations that offer better accessibility and richer amenities.
According to the South African Property Owners Association’s (Sapoa) office vacancy report for the fourth quarter of 2025, decentralised markets recorded a vacancy rate of 12.1%, lower than the 15.2% recorded in major CBDs.
However, Tshwane was backed by a strong and stable government tenant base that keeps vacancy levels comparatively low, it said. “Node-level fragmentation is intensifying, with modern precincts attracting demand while older assets lag. Spatial analysis is increasingly critical for assessing risk and guiding investment decisions,” noted the report.
As corporate flight increasingly redirects activity from traditional city centres to decentralised hubs such as Sandton, Midrand and Rosebank — signalling a structural shift in office demand — older office stock continues to linger in the CBD.
Octodec, a real estate investment trust (Reit) with significant CBD holdings, noted in its annual report last year that vacancies remain elevated in Pretoria and Johannesburg. The group is addressing this by converting underused space to accommodate niche operators and small businesses, including hairdressers, tailors and small-scale traders.
High-quality space
The shift towards decentralised nodes reflects a strong appetite for prime- and A-grade offices, offering modern, high-quality space, while lower-grade stock continues to lag.
The Sapoa report noted that more than half of all vacant office space sits in buildings at least 50% empty, particularly within the B-grade segment. Deep floorplates, valuation constraints and “shadow space” from partially occupied buildings are restricting repositioning efforts, sustaining rental pressure in weaker nodes.
Growthpoint, which holds a sizable office property portfolio, said in its trading update for the three months to end-September that its R3.5bn disposal target includes B-grade office blocks, older industrial and manufacturing assets, and noncore retail centres in underperforming CBD nodes.
According to Sapoa, prime and A-grade offices remain the most resilient, recording vacancies of 6% and 10.5%, respectively, underpinned by tenant consolidation and targeted upgrades.
The overall national office vacancy rate fell to 12.8% in the fourth quarter of 2025 from 13.6% in the first quarter, marking its lowest level since late 2020, as several major nodes recorded steady gains despite structural pressure in weaker markets.
Among South Africa’s metros, Cape Town continues to outperform, recording a vacancy rate of 6.1%, underpinned by broad-based improvements across key nodes and tighter supply.
Johannesburg, while showing signs of recovery, remains elevated at 15.8%, weighed down by a sticky oversupply and weaker absorption in older precincts. Durban’s office market continued its recovery, with vacancies at 12.1%, driven by a stronger performance in decentralised nodes.
Office development activity remained subdued, accounting for just 0.6% of existing stock, amid elevated vacancies, competitive rents and ongoing sublease releases. The development pipeline remains thin, constrained by a lack of major project starts and a tapering of completions compared with past cycles.
The report shows Sandton’s office vacancy at 15.5%, above its 35-year average of 12% but better than the 2022 peak of 21.2%. The node’s vacancy is now broadly in line with other decentralised Johannesburg precincts, reflecting a gradual recovery in one of the country’s most important office markets.
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