Despite the economic challenges South Africa has faced – COVID-19, State Capture, declining service delivery, and rising interest rates – the the SA commercial property value is estimated at an astonishing R1.92 trillion. (Commercial property and commercial real estate (CRE) describe the same asset)
To put this into perspective, that’s nearly 48% higher than the last official estimate from 2015. In USD terms, using an exchange rate of R17.5, this amounts to $110 billion.
Therefore, South Africa is Africa’s largest commercial property industry.
While the R1.9T might seem like an abstract figure, it has direct, concrete implications for businesses, the public sector, and investors alike.
Property value isn’t just for real estate professionals. It feeds directly into a variety of crucial metrics: from employment figures to taxes, rates and utility usage, and even insurance premiums. For every South African business, understanding the real value of CRE influences rent payments, operational costs, and the future of infrastructure development.
Consider this: South African listed property owners hold R400B of property (SA’s largest listed property fund, Growthpoint, at time of writing, holds assets worth R70.5 billion. Redefine, the second largest, sits at R60.4 billion). So, where does the rest of the R1.92 trillion come from? The bulk of the value resides with, in order, owner-occupiers, private owners, and pension and life funds. All these players are landlords to businesses just like yours, scattered across all provinces.
Up until now, even experts in the commercial property sector have only been able to guess at the true value of South Africa’s commercial real estate. The last comprehensive study was done in 2015 when the economy was in a different place. Back then, GDP growth was 1.3%, and interest rates were 2.25% lower. Today, the landscape has changed significantly. Even under these adverse conditions – post-COVID, weakened economy, and increased costs – the market has grown.
This 2015 SA commercial property value estimate of R1.3 trillion is outdated, which is why this new R1.92 trillion figure is so important. Not only does it show the resilience of the sector, but it can suggest new opportunities for investment, growth, and strategic decision-making.
Here’s a breakdown of the R1.92 trillion across South Africa’s provinces, showing how commercial property value compares to population size:
¹ Source of population data: “Statistics South Africa | Census Dissemination”
The high density metros of Gauteng and the Western Cape dominate the value share. The seemingly hidden opportunities in regions like Mpumalanga and Limpopo, where property values per capita are much lower, reflect a less formally urbanised population. This explains the growth of retail in these previously under-serviced areas.
The source of this R1.92 trillion figure comes from an unexpected but highly reliable place: the annual financial statements of 213 South African municipalities. Municipalities rely heavily on property rates and taxes for their revenue, which means they are highly incentivised to ensure property values are accurate. At the same time, property owners are equally motivated to keep those values in check, as inflated values lead to higher tax bills. This balance creates a natural accuracy in the data, which covers the entirety of the country’s commercial property landscape.
Further, while the value is a total number, it is based on the sum of specific, indvidual properties. This auditability is key for trust.
While this data is thorough, it’s important to note that the R1.92 trillion figure is conservative. It excludes state and municipal-owned commercial property assets, as well as hospitals, hotels, schools, and multi-dwelling residential properties (in mature economies the latter is considered part of the CRE market). Further, despite the natural accuracy/positive tension detailed above, munic property values are generally below market.
Interestingly, the value of commercial property can fluctuate significantly without a single new building being constructed. This is due to two main factors:
Understanding the true value of the SA commercial property value is essential for businesses, policymakers, and investors. It’s not just a statistic – it’s the foundation of a wide range of economic activities, from rental markets to taxation and energy consumption. A total value is the denominator for critical market penetration and total addressable market calculations. By unlocking the full picture of the R1.92 trillion CRE market, businesses can make better-informed decisions, municipalities can manage revenues more effectively, and the country as a whole can strategise for sustainable growth.
For the first time, South Africa has a clear view of its commercial property landscape, and with it, a wealth of new opportunities.
Beyond the headline figure, it’s crucial to analyse commercial property by grade, category (e.g., office, industrial, retail), and size / GLA. These are harder numbers to come by than the SA commercial property value, but they represent the next frontier of insight for South Africa’s commercial property market. And we at Gmaven are getting closer to unlocking them.
Improvon’s East Africa team, focused on the fast-growing industrial market, overcame deal making frustrations and blockers by implementing a custom BI-focused, CRM system. With Africa-specific, data asset management, sentiment analytics, and dashboards for real-time pipelines the team is empowered to accelerate sales, resource better, support the team, and scale operations.
Data-driven decision-making is a buzzword. Here is a practical example. Using unique CRE data, a major South African manufacturer figured out their actual penetration, identified R600M in untapped office market revenues and picked up their customers were paying 33% more. Using this data, the business could plan a precise sales strategy, prioritising the best-returning segments.
Over 40 and feeling the AI heat? Is it hype or hope? As a regular SA Joe with pretty good Excel and BA basics, I dove in to AI, tackling a real problem you likely wrestle with every day – moving raw data to useful output. Forget the 6 week old ways “black box”, I built a game-changer in 15 days. Join me as I share the wins, woes, and wisdom of my journey – proof you can too.
