South Africans kiss work from home goodbye

South Africa is slowly moving away from work-from-home, which is evident in the shift in demand for office space across the country and the decisions of major employers to limit remote opportunities.

This trend is reflected in the country’s commercial property market, where vacancy rates are decreasing and rental rates are on the rise. 

Growthpoint Properties, one of South Africa’s largest commercial property owners, has observed a clear shift back to office work.

Timothy Irvine, Growthpoint Properties’ Head of Asset Management, told BusinessTech that offices remain essential for building company culture, fostering employee training and development, and enabling teams to collaborate and engage with clients. 

According to Irvine, in-person interactions are still highly valued and, in some cases, more important than ever.

While the Covid-19 pandemic initially led to lower in-office headcounts, space reduction, and subletting, the demand for office space is rebounding as more people return to work onsite. 

Irvine noted that Growthpoint has seen a notable increase in parking demand at some office buildings and a rise in employers prioritising amenities like coffee shops to create more attractive work environments. 

At the end of 2024, Growthpoint reported that the first quarter of its 2025 financial year showed no tenant space reductions for the first time since the pandemic began. 

Irvine also said that Growthpoint’s strategic asset management and leasing initiatives have significantly contributed to this recovery.

One of the most striking examples of this trend is Sandton, a key commercial hub in Johannesburg. 

At its peak, Growthpoint’s Sandton properties had a vacancy rate of nearly 29%, equating to about 100,000 square meters of unused office space out of a total of 350,500 square meters. 

However, by June 2024, the vacancy rate had dropped to under 20% (approximately 70,500 square meters), a trend that has continued steadily. 

The company also noted minimal P-grade office vacancies, with single-figure percentages and rental revisions showing positive signs.

In other major markets, such as Cape Town and Umhlanga Ridge, Growthpoint anticipates record-high rental rates over the next two years, driven by decreasing vacancies and strong demand for premium office space. 

In the Western Cape and KwaZulu-Natal, the rebound in demand was swifter, with vacancies nearing zero in some areas.

“In Western Cape and Kwa-Zulu Natal (KZN), we see a reduction in vacancies and an increase in rentals, continuing the positive trends already clear in these areas,” Irvine said.

The shift away from remote work is not limited to Growthpoint’s portfolio. The Rode’s Report for the fourth quarter of 2024 also confirmed this trend.

The report showed that office rentals in South Africa have marginally surpassed pre-pandemic levels for the first time.

Additionally, vacancy rates have continued to decline, and rental prices are rising, signalling a broader move back to office work across the country.

Despite this recovery, the report noted that negative office rental reversion rates are still present, meaning newly signed leases are often at lower rates than expiring contracts.

CareerJunction’s Employment Insights Report for the fourth quarter of 2024 further supports this trend, showing a steady decline in work-from-home opportunities despite isolated growth in specific sectors.

During the pandemic, remote work surged, but remote or hybrid job listings fell from 4.3% in 2023 to 3.7% in 2024, indicating that this downward trend will continue.

CareerJunction’s survey also revealed that nearly 60% of South African employers now require more in-office presence. Vodacom is a prime example of a major South African employer shifting back to in-office work.

In 2024, the telecommunications giant ended its blanket hybrid work-from-home policy and required senior staff to return to the office.

This policy shift has impacted the company’s Vodacom Business as corporate clients recalibrate their spending on mobile and fixed-line services in response to a more office-based workforce.

However, Irvine added that hybrid work models are here to stay for a while in the country but at more normalised levels.

“Hybrid work, which was gaining traction even before the pandemic, is undoubtedly here to stay (although at more normalised levels), but it certainly hasn’t eliminated the need for physical workplaces,” Irvine explained.