Vacant South African retail space gives tenants new leverage
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A growing pool of vacant retail and commercial space in South Africa is shifting the balance of power toward tenants, giving occupiers room to negotiate lease terms, fit-out contributions and flexibility that would have been difficult to secure just a few years ago.
South Africa's retail property market has created a growing pool of retail and commercial space that is proving difficult to fill, shifting the balance of power toward tenants, according to Samuel Theu, national property manager at Atlas Finance. Having spent years on the landlord side at Growthpoint and City Property, Theu moved almost a year ago to representing a national tenant.
"The spaces many businesses are avoiding today are often where the biggest opportunities lie," says Theu. "If you understand how landlords think and what they need from a quality tenant, you approach negotiations very differently."
At a time when many financial institutions are reducing their physical footprints in favour of digital channels, Atlas Finance is expanding its branch network. It will open its 300th branch this month and has plans for around 50 more by the end of 2026, giving the company a front-row view of where value is emerging in the retail property market.
Theu identifies five opportunities occupiers and landlords should be paying attention to: the shifted balance of power in negotiations; investing occupancy savings into customer experience through quality shop-fitting and better environments; looking beyond traditional location metrics such as demographics and footfall to how customers actually move through communities; the value of consistent physical presence in building credibility; and new formats, including smaller-format branches, satellite locations and modular buildings in communities where conventional retail space is limited.
The company is also using AI-supported lease vetting to accelerate site assessments and shorten the time between identifying a property and opening for business. Atlas Finance began from a single office in Johannesburg's Trust Bank Centre on Eloff Street in 1994, and continues to expand its physical network more than three decades later.
"Brick-and-mortar is not legacy infrastructure," concludes Theu. "Used strategically, it remains one of the most underrated growth engines in the market."