Blog / Market roundup: retail buying, office pressure

Market roundup: retail buying, office pressure

Q: Which South African property sector performed best in 2025?

The MSCI South Africa Property Index returned 12% for the 12 months to December 2025, its strongest result since 2018, and the second consecutive year in which South Africa led MSCI global index constituents in local currency terms. The year before, the index returned 11.9% and topped the same table across 24 countries. Within the 2025 index, industrial returned 13.4% and retail 12.7%, while office returned 9.7%, the weakest major sector, although up from 9.4% in 2024.

11.9% annual return led MSCI constituents, while office lagged at 9.7% and Dipula cut office exposure to about 10%.

Anvil Research

August 25th, 2026

This week’s property news points in one direction: the national picture for South African real estate is strong, but office remains the sector that needs the most careful underwriting. For landlords, that affects pricing, capex and hold-sell decisions. For tenants, it shapes the kind of space coming to market and the lease structures attached to it.

Which South African property sector performed best in 2025?

The MSCI South Africa Property Index returned 12% for the 12 months to December 2025, its strongest result since 2018, and the second consecutive year in which South Africa led MSCI global index constituents in local currency terms. The year before, the index returned 11.9% and topped the same table across 24 countries. Within the 2025 index, industrial returned 13.4% and retail 12.7%, while office returned 9.7%, the weakest major sector, although up from 9.4% in 2024.

Total return, MSCI South Africa Property Index, all property, by calendar year:

All property total return

Source: MSCI South Africa Annual Property Index, via Absa CIB and Moneyweb.

Year	All property total return
2021	5.3%
2022	9.3%
2023	8.7%
2024	11.9%
2025	12.0%

Source: MSCI South Africa Annual Property Index, via Absa CIB and Moneyweb.

Total return by sector, MSCI South Africa Property Index, 12 months to December 2025:

Sector	2025 total return
Industrial	13.4%
Retail	12.7%
Office	9.7%

Source: MSCI South Africa Property Index sector returns, via Absa CIB and Moneyweb.

Retail carries the index by weight (about 61% by value) and returned 12.7%, up from 12% the year before. Office is about 18% of the index and industrial about 11%.

That sector split helps explain two of the week’s biggest stories.

Why is Transnet selling the Carlton Centre?

Transnet gazetted 15 non-core properties for disposal on 24 August 2026, with the Carlton Centre in the Johannesburg CBD the headline asset. The combined value attached to all 15 properties is about R900 million, not R900 million for the Carlton Centre alone. State entities now have 30 days to express interest before the sale opens to the public. The backdrop is telling: the building was marketed about three years ago at close to R1 billion, then withdrawn after weak offers, and in September 2024 Transnet said it would convert the building rather than sell it.

Seen through the office lens, the Carlton is a single-asset version of a broader market problem. Large older CBD towers can carry building quality and spec trade-offs against newer stock, even when their pricing looks compelling on paper. For an owner, that can mean a long hold period, heavy repositioning costs or a change-of-use case. For a tenant, cheaper space may come with compromises on configuration, services or image.

What did Dipula buy for R2 billion?

Dipula agreed to acquire nine retail centres from the Moolman Group and its coinvestors for R2 billion. The portfolio spans Gauteng, Limpopo, North West and the Free State, with 89168 m2 of gross lettable area at a 9.3% yield. Funding includes a R1.1 billion equity raise. The largest single line is a 50% interest in Lephalale Mall at R516 million. After the deal, Dipula’s retail exposure rises to about 80% of income, while office falls to about 10%.

That is a listed fund acting on the same arithmetic the MSCI numbers describe. Retail and industrial have offered a cleaner earnings case than office, so capital is being directed accordingly. Dipula is not exiting offices altogether, but moving office down to about 10% of income says a lot about where management sees the better risk-adjusted use of capital.

Our own listing data adds local pricing texture to that backdrop. Across Anvil listings, the median asking office rent was R120 per m2 in 2026 to August, versus R110 per m2 in full-year 2024. The median asking sale price in 2026 to August was R15592 per m2. These are asking levels from listings, not achieved lease escalations or return measures, so they should not be read as proof of the MSCI performance numbers.

They do, however, show the kind of pricing owners are taking to market while the listed sector keeps marking office as the weakest major segment. In practical terms, landlords with well-located, fit-for-purpose offices can still defend rentals and sales pricing if the asset matches current tenant requirements. Owners of older or harder-to-place stock face a different equation, where disposal, conversion or deeper capex becomes more likely.

For tenants, a softer office investment backdrop does not automatically mean every building is a bargain. The lower-priced end of the market often comes with location or lease-term trade-offs, especially in nodes where vacancy risk is higher or the stock is dated. For landlords, the same reality means sharper competition for creditworthy tenants and more pressure to justify rent with building quality, parking, services and flexibility.

The week’s three stories fit together cleanly. South Africa’s overall property return is strong. Retail capital is still being deployed at scale. Office remains investable, but it is the weakest of the major sectors, and that weakness is showing up both in portfolio strategy and in what happens to complex assets like the Carlton Centre.