South Africa Property Trends | Rode Report Q3 2025 Overview
The Key Insights from the Rode Report in Q3 2025 give a clear picture of where the commercial and industrial property markets are heading — and more importantly, what these trends mean for anyone leasing, owning, or investing in property. Below, we break down the most important takeaways.
Understanding the Core Insights Behind the Q3 2025 Rode Report
The Q3 2025 Rode Report highlights two clear themes shaping South Africa’s commercial property landscape. Industrial property continues to dominate as the strongest-performing non-residential asset class, with sustained demand keeping vacancies tight and rental growth firmly in positive territory. At the same time, the office market is making a gradual comeback, though the pace varies by node — some decentralised areas are gaining momentum, while others still have a way to go. These dynamics matter because they directly influence rental expectations, vacancy risk, and how owners and investors position their portfolios for the long term.
How Did South Africa’s Industrial Property Market Perform in Q3 2025?
The industrial property market continues to outperform, supported by exceptionally low vacancies and strong demand for warehousing and logistics space. Rentals for 500 m² units grew by 8.4% year-on-year, and now sit 31% above 2019 levels, demonstrating how resilient the sector has been over time. Vacancies remain tight at 3.8%, with Cape Town recording standout growth of ±14% due to extremely limited supply. Larger 1,000 m² units saw similar rental gains of 8%, confirming consistent demand across size categories.
When vacancies hold at these levels and demand continues to exceed supply, rental growth remains firm and investment performance tends to follow. Well-located industrial assets — particularly those in logistics-heavy corridors — rank among the strongest performers in the commercial landscape. This environment also creates room for strategic upgrades, with many owners unlocking additional value through modest repositioning or operational improvements to older stock.
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Is South Africa’s Office Market Recovering in Q3 2025?
The office sector is steadily recovering, although performance varies widely between nodes and building grades. National decentralised vacancies across grades A+, A, and B improved from 13.3% to 12.3%, supported by the ongoing return to physical workplaces. Grade-A decentralised rentals grew 4.1% year-on-year, with Cape Town leading at roughly 10% growth. Durban also showed strong momentum in the La Lucia/Umhlanga node, while Johannesburg displayed a more mixed pattern: Waterfall rose by 7.3%, Sandton by 3.5%, and Rosebank by 1.8%.
These shifts reflect a clear “flight to quality,” where tenants prioritise well-specified, energy-efficient, flexible spaces in strong decentralised nodes. Limited new construction and the increasing conversion of older office buildings are helping stabilise supply in these precincts. For landlords, this underscores the need to remain competitive — whether through upgrades, reconfigurations, or redevelopments in areas where older stock struggles to attract demand. As businesses refine their space requirements, well-located, high-quality buildings are best placed to benefit from the sector’s ongoing recovery.
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How Are New Supply and Construction Costs Shaping the Market in 2025?
The Rode Report highlights that non-residential building activity has picked up by around 10% in early 2025 compared to the same period in 2024, though still below long-term averages due to a significant decline in office construction. Office developments now represent just 10% of all non-residential building activity, down sharply from 23% in 2019, whereas industrial buildings have increased to 64% of total activity. This shift reinforces the tight-supply dynamic underpinning both the industrial rental surge and the selective office recovery. Building-cost inflation has also eased, with the BER Building Cost Index showing ±4% deflation, lifting real rentals — though not yet enough to spur major new development.
What is the Markets Impact on Industrial and Commercial Property Owners in South Africa
Based on the Rode Report’s findings, industrial landlords are positioned for continued strength as vacancies remain below 4% and new construction activity stays limited. High-demand nodes such as Cape Town and key logistics corridors in Gauteng are seeing the strongest value growth. This creates meaningful opportunities for owners: older buildings can be repositioned to meet evolving tenant needs, lease renewals can be structured to capture rental momentum, and expansion strategies may be worthwhile in areas where stock remains constrained.
The office market’s recovery is more uneven, with performance varying sharply by location. Buildings in strong decentralised areas — such as Rosebank, Sandton, Waterfall, Menlyn, Umhlanga, and Century City — are best placed to capture rising demand. The flight to quality is guiding tenant behaviour, making modern, energy-efficient, flexible spaces increasingly attractive. For office owners, the strongest returns lie in improving building quality, focusing on active demand clusters, and evaluating whether assets in weaker nodes require upgrades or repurposing to stay competitive.
Is This a Turning Point for the Market?
The latest findings from the Rode Report in Q3 2025 point to a market that is gradually stabilising, with industrial property maintaining strong momentum and office performance improving where vacancies continue to decline. For owners and investors, these results emphasise the importance of asset quality, location, and understanding how tenant demand is shifting across nodes. As confidence builds across South Africa’s commercial property landscape, this is an opportune moment to reassess portfolio positioning — whether that involves refining leasing strategies, planning disposals, or optimising existing assets.
If you’re navigating decisions around leasing, sales, or broader strategic planning, now is an ideal time to request tailored guidance from our commercial property specialists.
