By Siya Jele, TUHF Regional Manager for KwaZulu Natal
The increase in Grade A office and commercial developments, such as Waterfall City in Midrand and Menlyn Maine in Pretoria, has led companies to migrate from traditional office nodes to newer, more environmentally sustainable office buildings. This leaves historic commercial nodes underutilised, creating opportunities for property entrepreneurs to convert buildings into high-density residential assets.
As pressure mounts regarding the shortage of affordable housing in urban areas, compounded by high commercial vacancy rates and the growing built-to-rent residential subsector, municipalities are more inclined to approve high-density redevelopments. New investment into these urban areas has a positive fiscal impact for the municipality, as their rates and taxes collections improve. For property entrepreneurs, municipalities’ willingness to approve refurbishments and rezoning applications presents an opportunity to reimagine obsolete buildings as high-value assets.
When the repurposing profile makes commercial sense
The most interest in building reuse is in C Grade office conversions, where existing infrastructure and access to amenities like transport hubs support redevelopment for housing and mixed-use projects.
Underutilised hospitality buildings are also attracting attention, because their existing structure is well-suited to high-density housing conversions.
Additionally, well-located light industrial warehouses that are close to Central Business Districts (CBDs) are attractive, as some of the original building designs lend themselves to easy conversion for residential purposes. Depending on location, mixed-use developments that incorporate retail or personal services make good business sense as they add amenities to the node.
A national view of the adaptive use movement
Johannesburg is currently leading the charge. The city’s inner-city suburbs, as well as Rosebank, and Sandton are at the forefront of office‑to‑residential conversions, where older C‑Grade offices and mixed‑use properties are being transformed into student housing and affordable rental apartments. This trend reflects both the scale of vacancy in Johannesburg and the urgent demand for accessible urban living.
Cape Town presents a different dynamic. With lower vacancy rates and stronger fundamentals in its CBD, traditional office conversions are limited. Instead, developers are repurposing light warehouses and peripheral commercial sites in areas such as Salt River, Observatory, and the City Bowl. These projects are reshaping outdated industrial spaces into high‑yield residential complexes and co‑living hubs, aligning with Cape Town’s lifestyle‑driven market and focus on community‑oriented living.
Similarly, KwaZulu-Natal (KZN) is seeing targeted investment in adaptive reuse, primarily concentrated in Durban's inner-city, Berea, and Pinetown. We are also seeing growing interest in areas like La Lucia, Umhlanga, Ballito. Unlike Gauteng or the Western Cape, KZN’s conversion market is narrower. It focuses heavily on affordable student accommodation and social housing, while its warehouse market follows a strictly commercial path.
Furthermore, metros like Tshwane and Nelson Mandela Bay are also emerging as important hubs of conversion activity. In Tshwane, Hatfield, Centurion, and the Pretoria CBD are seeing targeted projects, while Gqeberha in Nelson Mandela Bay is experiencing conversions around manufacturing zones and older commercial nodes.
Together, these regions highlight how adaptive reuse is spreading beyond Johannesburg, supporting urban renewal and diversifying housing supply across South Africa’s metropolitan landscape.
Sound future-proofed commercial vision
In our experience, many property entrepreneurs are leaning towards a precinct approach to redevelopment. The approach allows the entrepreneur to exert influence over the revitalisation of the whole node by investing in multiple building refurbishments on the same block.
Precinct approaches give the entrepreneur influence over other factors that impact building value, such as safety and security, cleanliness, or access to technology like public WiFi. Including retail space or additional secure parking in the precinct improves residents’ access to amenities, while forming central improvement districts with other landlords in the area to invest in security and cleaning initiatives helps to reduce crime. These improvements benefit the node as a whole, so that entrepreneurs can attract and retain good tenants.
The power of reinventing underutilised buildings in this way lies in densification that doesn’t lead to overpopulation of urban nodes. Decent, more modern, affordable housing and improved existing infrastructure attracts new investment into these nodes such that lives and livelihoods are improved, while the city increases its revenue collections.
The approach is beneficial to the whole value chain – from tenants living, working and playing in the area, to the municipality itself, to the entrepreneurs and investors who benefit from improved rentals and growing investments.
Challenges do exist
In cities with special planning commitments – such as industrial development zones or areas earmarked for social services like education or healthcare – redevelopment can be challenging. Though rezoning has become easier to achieve in certain markets, the challenge often lies in the surrounding buildings.
For example, a residential development surrounded by industry may struggle to attract tenants. This necessitates a precinct approach to create a residential hub and change public perceptions about the area. Precinct redevelopments require a large upfront capital investment to buy up enough property to secure critical mass and shift perceptions.
Entrepreneurs with vision need to secure funding and support to bring their precinct vision to life. Overcapitalisation can be a risk, as it can be challenging to balance upfront capital investment against long-term returns. For smaller entrepreneurs, getting this balance right is critical to the project’s long-term success, and conveying the vision to traditional financial institutions isn’t always easy. Working with partners that understand the entrepreneur’s vision and are willing to invest in it is key.
The design of the existing building can present a challenge, too, both in terms of plan approvals and maximising the repurposed space. Working with an experienced team that specialises in adapting existing structures can help to eliminate structural integrity risks and minimise dead space in the reconfigured building. The ideal outcome is a building that maximises revenue-generating space and incorporates new and appropriate amenities for residential tenants.
Building sustainably adds short and long-term value
The kinds of amenities that add value and make commercial sense include sustainable building interventions, like energy and water efficiency fixtures as a base level, to considering onsite renewable energy and water storage solutions to minimise the impacts of grid outages.
We’re seeing an increase in entrepreneurs seeking green building certifications, like EDGE, for housing developments. This is partly because the technology required to achieve certification makes commercial sense for them and their tenants, and partly because these certifications can help unlock more funding opportunities.
Our partnership with the IFC, for example, gives clients access to financial assistance to offset the upfront greening investment in the form of a rebate into their loan account. There are long-term benefits as well, as tenants save on utilities due to energy and water efficiency measures.
Reimagining obsolete buildings as high value assets presents promising growth opportunities for the entrepreneurs themselves and has a positive impact on the surroundings. They modernise infrastructure and play a significant role in attracting new capital investment into the precinct.
