2024: Looking Back at a Positive Year for Cape Town’s Commercial Space
The commercial property sector experienced a dynamic 2024 as the industry continued its post-COVID recovery, with businesses across the country returning to the office.
In the Western Cape—particularly in Cape Town — office rentals and the industrial property sector followed an upward trend. Vacancies remained low by historical standards, and exciting new developments brought billions of rands in investment to the city, including Cape Town’s historic CBD.
With the New Year now behind us, we take a moment to reflect on the year that was and offer a roundup of the major market trends that shaped the past 12 months.
Office vacancies remain low as RTO gains momentum
One of the key trends in the global office market last year was the return-to-office (RTO) movement, as many businesses phased out remote working policies popularised during the pandemic.
Load shedding accelerated this trend as business owners found that investing in on-site electricity generation was far more reliable than allowing employees to work remotely, only to disc
over that a significant portion of their workforce was without power for hours at a time.
In Cape Town, the RTO movement is still evident in the current property market. The vacancy rate in offices has more than halved from almost 14%. Vacancies now stand at 6.3% with units in sought-after buildings especially hard to secure.
Given the city’s general upward trajectory over the past few years, we anticipate seeing this trend continue in 2025.
While several exciting new developments are expected to come onto the market, Cape Town’s enduring popularity—fuelled by continued migration to the Western Cape — could see new stock absorbed quickly, maintaining low vacancy levels.
Smart offices and AI set the tone for Cape Town’s future
Artificial intelligence (AI) entered its second year of widespread implementation, reshaping technological expectations for office tenants worldwide. AI-ready buildings, offering seamless digital integration, and smart buildings equipped with features to enhance energy efficiency, security, and convenience are becoming the premises of choice.
This is particularly true among younger tenants, who embrace technology-driven lifestyles and extend these preferences to their work environments.
Cape Town’s office rentals market, buoyed by a wealth of newly constructed buildings, is well-positioned to meet this demand. The city offers a variety of modern, tech-enabled office spaces that cater to tenants embracing digital transformation.
As this trend spreads across South Africa’s private sector, Cape Town is poised to remain a leading destination for technologically advanced commercial space.
Politics: New hope from the GNU
2024 was an historic year for South Africa’s democracy, with a Government of National Unity (GNU) taking office 30 years after the country’s first democratic elections.
Following months of negotiations, the ANC formed a coalition government with the DA and nine smaller political parties, calming investor concerns and delivering some notable early successes. When the coalition was formed, many believed its success would be judged on technical performance rather than political rhetoric.
To date, the coalition has achieved several milestones, including a sustained period without load shedding — though this came alongside a whopping 36.1% electricity price hike set for 2025.
Measurable progress has also been seen in areas such as logistics, public and goods transportation and improvement of the main ports. Run by the DA, the Department of Home Affairs introduced a comprehensive plan to deal with the backlogs of visas, passports and work permits.
The Western Cape has long been an outlier in South African politics, with three different parties governing the province since the end of apartheid. This political diversity is often credited with driving the province’s above-average service delivery — a trend we hope to see continue.
A stable national administration under the GNU, combined with the Western Cape’s established local government, could pave the way for even greater growth in the local property market.
The retail sector stages a comeback
The retail sector faced significant challenges during the pandemic as consumers shifted from in-store shopping to online purchases, encouraged by the rise of fast delivery services. A steady change in consumer behaviour for online shopping and e-commerce created a new demand for industrial warehousing and storage facilities.
Despite these changes, Cape Town’s CBD appears to be undergoing a retail revival. Specialist stores are reopening, and retail vacancies dropped to pre-pandemic levels.
- While the future of retail may involve a blend of physical and online shopping, many customers are rediscovering the unique, in-person shopping experience that physical stores offer.
- Some businesses are adapting by integrating online ordering capabilities with in-store experiences, streamlining deliveries, and reducing the need for large on-site inventories.
These trends are encouraging signs for Cape Town’s retail property market.
Cape Town remains a premier property destination
2024 has been a productive year for Cape Town’s commercial space sector, as the city continues to solidify its reputation as South Africa’s premium destination for commercial premises.
A recent 2025 report seems to claim that the semigration bubble is imploding as a result of rising costs and congestion in and around the CBD, but the low vacancy rates for retail and office rentals in Cape Town tell another story.
New developments, and the appeal of coastal living—bringing high-net-worth individuals and business owners to the province—are still positive factors contributing to Cape Town’s attractiveness as a business hub.
If you’re in the market for premium office space in the Cape Peninsula, look no further than our portfolio of sought-after Cape Town office and industrial properties. Contact our experienced team today to start your journey to the perfect office space.