Johannesburg market overview
A year in review
- Mieke Purnell
Johannesburg features the largest and most established office market in South Africa and is considered Africa’s economic gateway. Arguably for the first time since the impact of the pandemic was truly comprehensible, indications of recovery within Johannesburg’s office sector are finally emerging. Several primary drivers of this recovery, including the hybrid workplace attendance modal becoming a more permanent reality, the continual ‘flight to quality’, and the ever-growing importance of sustainability interventions in buildings are bolstering demand.
Johannesburg’s central location is considered strategic, as the city is well-positioned to transport goods from ports to the rest of the country and neighbouring states. A continuous drive toward supply chain optimisation, onshoring, and operational risk diversification is furthering the demand for secure, modern, logistics facilities in the region. As a result, there is an undersupply of quality facilities available. Despite the prevailing strong demand and lack of supply, the logistics market in Johannesburg will not be without its challenges in 2023. Rolling blackouts will continue to weigh on productivity and output, while inflationary pressures and the rising cost of living dampen consumer demand and spending power.
The city’s tourism market has historically been underpinned by business tourism and transit guests staying overnight before making their way to their ultimate destination within South Africa (or before flying out). The sector, therefore, came under immense pressure through the pandemic, and the situation has lagged in recovery as business travel, and the MICE sector remains depressed. That said, the past year or two has seen an influx of intra-African travellers visiting Johannesburg and staying in mixed-use precincts such as Sandton. This has provided some much-needed respite to the local hospitality sector. Furthermore, there are indications of positive sentiment toward this market over the medium to longer term, with branded hotel groups announcing development plans and new hotel openings for the upcoming year.