The R196bn gap: Why Joburg commercial property is trading at a massive discount
Written on
Johannesburg's commercial property market is valued at an estimated R196 billion below comparable Cape Town levels, with offices trading at roughly half the price per square metre, according to a Gmaven analysis.
Johannesburg-based commercial property is valued at an estimated R196 billion below comparable Cape Town-adjusted levels, according to a new analysis by South African commercial property data company Gmaven.
The study examines 25,700 properties and 1,706 high-value commercial transactions recorded since 2020. Johannesburg contains 44.9 million square metres of rentable commercial space, 54 percent more than Cape Town's 29.2 million square metres, yet the two markets are worth roughly the same: R376 billion for Johannesburg and R365 billion for Cape Town.
Office space shows the widest divergence, trading at a weighted average of R10,121 per square metre since 2020 compared with R20,524 in Cape Town. Capitec's recent acquisition of an A-grade Sandton office building for R245 million, or R11,164 per square metre, illustrates the scale of the discount, Gmaven says.
The analysis suggests that sustained improvement in service delivery and city administration could influence vacancy levels, investment decisions, and the prices buyers are willing to pay for Johannesburg assets, with South Africa's local government elections in November providing a potential test of that thesis.