SAPOA Q3 2026 Regional Office Vacancy Report

The report grades office buildings and uses two terms in a specific way. These are its definitions.

• • Office recovery continues to gain traction. South Africa’s office vacancy rate declined to 11.8% in Q3 2026, five percentage points below its mid-2022 peak, supported by positive net absorption and a further reduction in available space.
• • Recovery broadens beyond higher-quality offices. Vacancies declined across A-, B- and C-grade offices, with C-grade recording the largest quarterly improvement. Prime vacancies remain exceptionally low at 4.7%, while asking rentals are rising across all grades.
• • Regional recovery progressing at different speeds. Cape Town remains the tightest major metro at 6.9%, while Durban and Tshwane now also record vacancies below 10%. Johannesburg has improved materially since 2022, while Gqeberha continues to lag the broader recovery.
• • Decentralised markets maintain their advantage. Decentralised vacancies remain substantially below the CBDs at 11.0% versus 16.1%, although performance varies considerably by metro. Cape Town’s and Durban’s decentralised markets stand out with particularly low availability.
• • Limited new supply supports market rebalancing. Development activity has fallen to just 0.5% of completed stock, with approximately 100,500 m² under construction. A 70.4% pre-let rate indicates that the limited pipeline remains predominantly tenant-led.
• • Distress is increasingly concentrated in specific assets and nodes. Broader market improvement masks persistent pockets of distress, particularly among secondary-quality buildings. Highly vacant properties remain geographically concentrated, with Johannesburg CBD recording the greatest incidence of distressed offices.
• • Surplus space has fallen substantially since the peak. Around 920,000 m² of available office space has been removed from the market since June 2022, although the remaining 2.25 million m² means the absorption challenge remains larger than at comparable vacancy rates in earlier cycles.
• • Micro-location increasingly differentiates performance. Large vacancy differences within individual office nodes show that headline market averages can conceal materially different conditions. Building quality, age, specification and micro-location are becoming increasingly important determinants of occupancy and leasing performance.

South Africa’s office vacancy rate improved to 11.8% in the third quarter of 2026, its lowest level in more than six years. The improvement extends the sector’s recovery from the mid-2022 peak, when vacancy reached 16.8%, and marks a further step towards more normalised market conditions. Of the 54 nodes surveyed, vacancy improved in 23, deteriorated in 21 and was unchanged in the remaining 10.

The survey covered 2,691 completed office properties and active developments across 54 nodes, together almost 19.5 million m² of gross lettable area including developments under construction.

The Market at Key Points in the Cycle

Office market fundamentals continued to strengthen during the quarter. The improvement was supported by positive net absorption of almost 70,000 m², while the amount of completed space available declined further. Asking rental growth remained relatively firm at 7.2% year-on-year, despite easing from recent highs. At the same time, the development pipeline remains constrained and increasingly tenant-led, with 70.4% of space under development already pre-let. Together, improving occupancy, positive absorption and limited speculative development point to a progressively tighter office market, although conditions continue to vary considerably across individual nodes and grades.

Office market fundamentals continued to strengthen in Q3 2026, with the improvement increasingly extending beyond higher-quality stock. A-grade vacancy declined to 9.5% and B-grade eased to 15.9%. The strongest quarterly improvement was in C-grade offices, where vacancy fell by 80 basis points to 15.6%, moving marginally below B-grade. Prime vacancy edged up to 4.7% but remains exceptionally low relative to the other grades and its historical range.

National Office Vacancy by Grade

Rental trends provide further evidence of improving market conditions. Prime asking rentals reached R234/m² per month in Q3 2026, extending a strong period of rental growth and widening the premium to the other grades. A-grade rentals averaged R149/m², while B- and C-grade rentals increased to R123/m² and R101/m². The upward trajectory across all four grades is notable, with improving occupancy increasingly supporting rental levels beyond the Prime segment.

The recovery is also becoming more broadly based. Prime stock continues to benefit from constrained availability, with vacancy below 5% supporting greater pricing power, while improving B- and particularly C-grade vacancy suggests firmer conditions across secondary-quality stock. Some of this improvement may reflect the conversion of older or less competitive offices to residential and other uses, removing surplus space alongside improved tenant demand. While this is helping to rebalance supply, the persistent vacancy gap between Prime and secondary stock highlights the continued importance of quality, location and building competitiveness.

In Cape Town the grades are tighter: adding up the node table at the end of this article gives Prime vacancy of 2.2%, A-grade 4.2%, B-grade 12.6% and C-grade 16.4%.

The latest regional data show a marked divergence in office market conditions across South Africa’s major metros. Cape Town remains the tightest market at 6.9%, followed by Tshwane at 8.9% and Durban at 9.3%. At the other end of the spectrum, Gqeberha and Johannesburg continue to record considerably higher vacancy of 15.7% and 14.7%. This spread of almost nine percentage points between the tightest and weakest markets highlights the increasingly localised nature of office demand and supply.

Office Vacancy by Metro

SAPOA has revised its earlier quarters since the Q2 report, so some of the June, March and December figures here differ slightly from those in our Q2 article.

The scale of the recovery since early 2022 has also differed substantially between metros. Durban has recorded the largest improvement, with vacancy down 6.8 percentage points since Q1 2022, marginally ahead of Cape Town’s 6.1-point reduction. Johannesburg has also made significant progress, with vacancy falling 4.8 points despite remaining comparatively elevated. Tshwane has improved by 3.2 points, while Gqeberha’s vacancy has declined by only 1.2 points.

Importantly, lower vacancy is no longer confined to Cape Town, with both Durban and Tshwane now below 10%. Johannesburg’s sizeable improvement from its 2022 levels indicates that excess space is gradually being absorbed in the country’s largest office market, although availability remains substantial. Gqeberha stands apart, with limited improvement and vacancy still above 15%. Overall, the office recovery is broadening geographically, but at distinctly different speeds, reflecting differences in occupier demand, local economic conditions, development activity and the amount and competitiveness of existing office stock.

The distinction between CBD and decentralised office markets remains pronounced, with decentralised vacancy at 11.0% compared with 16.1% across the CBDs nationally. The five-point gap continues to reflect stronger occupancy outside the traditional city centres, although performance varies considerably by metro, and the aggregate figures mask some notable exceptions, particularly Tshwane, where the relationship between CBD and decentralised vacancy is effectively reversed.

Tshwane’s CBD remains an outlier, with vacancy of just 3.5% compared with 9.9% across its decentralised nodes, which likely reflects the capital’s distinctive occupier base, where government-related demand underpins CBD occupancy. Cape Town presents a different pattern: decentralised vacancy remains exceptionally low at 2.7%, while its CBD vacancy has risen to 12.5%. The widening gap suggests demand continues to favour Cape Town’s decentralised office nodes despite generally tight conditions across the broader metro.

Johannesburg continues to face the greatest CBD challenge, with vacancy of 23.4% compared with 13.5% in decentralised locations. Durban shows an even wider relative divergence, with CBD vacancy of 19.7% against only 5.3% across its decentralised nodes. Among decentralised markets, Cape Town and Durban therefore stand out with particularly low availability, while Johannesburg remains the most challenged of the four major metros. Overall, location within a metro remains a significant determinant of office performance, with decentralised nodes generally benefiting from stronger demand and lower vacancy than the traditional CBDs.

The CBD and decentralised figures in this section, like the left-hand chart, run to June 2026. By September, the node tables put CBD Cape Town at 14.0%, CBD Johannesburg at 21.6% and CBD Durban at 15.7%, with Pretoria’s CBD unchanged at 3.5%, and the right-hand chart shows decentralised vacancy of 2.7% in Cape Town, 4.4% in Durban, 10.4% in Tshwane, 13.3% in Johannesburg and 15.7% in Gqeberha.

Office development activity remains exceptionally subdued, with projects under construction equivalent to just 0.5% of completed office stock. Development declined to approximately 100,500 m² (100,503 m²) in Q3 2026, near the lowest levels recorded in the survey’s history and well below previous development cycles. Despite improving vacancy and rental growth, the limited pipeline suggests developers remain cautious about adding new supply, with the market continuing to prioritise absorbing and repositioning existing stock. Of the space under construction, 29,750 m² is still available to let.

The limited development that is proceeding remains predominantly tenant-led. Around 70.4% of space under development is pre-let, comfortably above the long-term average of 55.3%. Although below the particularly high pre-let rates of recent years, the current level indicates that substantial tenant commitment remains an important prerequisite for new projects. The combination of low development volumes and relatively high pre-leasing reduces the risk of speculative supply adding materially to future vacancy.

The constrained pipeline is becoming an increasingly important part of the recovery story. With development having fallen sharply from the elevated levels of the previous cycle, relatively little new uncommitted space is entering the market just as vacancy is declining and rental growth is strengthening. This should support further rebalancing of supply and demand, while creating opportunities for selective new development where occupier requirements, location and achievable rentals can justify construction.

Cape Town accounts for 34,000 m² of the national pipeline, about a third: 15,000 m² in the Central node (Pinelands and Black River Park), 10,500 m² in the CBD and 8,500 m² in Century City. The detail is in the Cape Town table below.

The distribution of rentable office space across vacancy brackets highlights the uneven nature of the recovery. While around half of A-, B- and C-grade stock is fully let, performance differs materially across the remaining space. A-grade offices have a greater proportion of space in the lower vacancy brackets, while B- and C-grade buildings account for more stock at elevated vacancy levels. This suggests distress remains concentrated in lower-grade assets despite improving market fundamentals.

Distressed assets continue to face significant barriers to recovery. Physical limitations can reduce their appeal to modern occupiers, while valuations, refurbishment costs and redevelopment feasibility may constrain intervention. Weaker properties may therefore continue to put downward pressure on rentals in the affected nodes, with landlords relying on competitive rents, incentives or alternative uses to improve occupancy.

Highly vacant buildings are also concentrated in specific nodes. Johannesburg CBD has the largest proportion of distressed properties, with more than a third of its buildings above 30% vacancy, followed by Milpark and Walmer/Fairview, and several other Johannesburg nodes also feature prominently. While broader occupancy fundamentals are improving, persistent pockets of highly vacant buildings suggest an increasingly polarised market in which asset quality, location and building competitiveness are becoming more important determinants of performance.

The Cape Town CBD displays meaningful differences in office performance across its precincts, with vacancy ranging from 7.6% to almost 20%. The variation is notable given the CBD’s relatively compact geography, and it reflects differences in the composition of office stock: some precincts have a greater concentration of older buildings, while others have benefited from newer developments and refurbished stock. Together with accessibility and amenities, these differences can materially influence occupier demand.

Cape Town CBD Offices by Precinct, All Grades

The area between Wale and Strand Streets records the highest vacancy at 19.9%, around 35,600 m² of available space. The larger precinct between Wale and Hans Strijdom has a lower vacancy rate of 16.9% but, given its greater stock base, accounts for the largest volume of vacant space at approximately 58,700 m². By comparison, the area east of Hans Strijdom records 11.0%, while the western and peripheral parts of the CBD perform considerably better at 7.6%.

These differences show why a headline CBD vacancy rate can obscure important variation at a more granular level. Building age, quality and specification can materially influence performance alongside location, particularly as occupiers favour modern and efficient space. Granular spatial analysis can therefore give owners and investors additional context when assessing leasing prospects, competitive positioning and potential repositioning opportunities.

The long-term relationship between vacancy rates and available space shows how much the scale of South Africa’s office market has changed over successive cycles. While the vacancy rate is a useful measure of market balance, the absolute volume of vacant space gives important context: at similar vacancy rates, today’s larger office market can contain substantially more available space than during earlier periods of market weakness.

By September 2026, vacancy had declined to 11.8%, with approximately 2.25 million m² of completed office space available. That is a substantial improvement from June 2022, when vacancy reached 16.8% and available space exceeded 3.1 million m². Around 920,000 m² of available space has therefore been removed from the market, reflecting both absorption and changes to the underlying stock. Nevertheless, available space remains above the levels associated with comparable vacancy rates in earlier cycles.

The recovery therefore needs to be viewed in terms of both the vacancy rate and the quantum of space being worked through. Encouragingly, considerable progress has been made since 2022, and the limited development pipeline reduces the risk of significant new supply. Further absorption, together with conversions and the repositioning of less competitive buildings, should support continued rebalancing. For owners, the uneven distribution of the remaining vacancy reinforces the importance of asset quality, location and active asset management.

The survey divides Cape Town into seven office nodes. The figures in the table below describe the buildings inside these boundaries.

• • Bellville: Jip de Jager / Mike Pienaar to the west, Voortrekker Road to the south, Old Oak to the east and Van Riebeeck Road to the north.
• • CBD Cape Town: Chiappini Street to the west, the Gardens suburb to the south, Tennant Street to the east and the harbour freeway to the north.
• • Century City: properties within the Century City mixed-use node, including offices on either side of Ratanga Road up to Century Boulevard.
• • Claremont: Highwick / Pine to the south, Protea / Campground Road to the north, Palmyra to the east and the M3 to the west.
• • Central: the Pinelands office node and the Black River Park precinct, bounded by Settlers Way to the south, Jan Smuts to the north and east, and Liesbeek Parkway to the west.
• • Rondebosch / Newlands: Protea / Campground Road to the south, Woolsack Road to the north, Campground Road to the east and the M3 to the west.
• • V&A Waterfront: properties within the V&A Waterfront precinct.

The regional report’s node table gives every Cape Town node’s rentable area, available space and vacancy by grade (P = Prime), how vacancy has moved over the past three quarters, and the lowest, highest and median gross asking rental. Areas are in m² and rentals in rand per m² per month.

Gross asking rentals are the basic rental plus fixed contractual recoveries, excluding metered utilities, and may differ from the rental achieved after negotiation. A dash means the report gives no asking rental for that row, either because there was no vacant space or because no asking rental was disclosed.

Committed New Developments in Cape Town

What stands out. The CBD holds 1.05 million m², 37.5% of Cape Town’s office space, but 146,102 m² of the city’s 192,862 m² available, about 76%. Its B-grade buildings alone account for 86,223 m². The six decentralised nodes together are at 2.7%.

The CBD’s rise from 9.9% to 14.0% over the past three quarters came mostly from A-grade, which went from 2.2% to 10.7%, while B-grade rose from 15.3% to 16.9% and C-grade from 14.6% to 17.1%. Claremont went the other way, from 7.4% to 5.3%, as its B-grade vacancy fell from 15.7% to 7.5%, and Rondebosch / Newlands is now the tightest node in the city at 0.7%.

The V&A Waterfront is effectively full at 0.8%, and its Prime space asks the highest rental in the city at R420/m². Of the 10,500 m² under construction in the CBD, 9,177 m² is still available, while Central’s 15,000 m² has 1,600 m² left. Central’s Prime stock has grown to 90,000 m², all of it let.