Businesses looking for new home as they flee service failures in Gauteng
Major commercial property owners are moving their money to cities where services are reliable, with the Western Cape attracting the most attention.
Gauteng, especially Johannesburg, is struggling as water, power, and failing local government systems are becoming growing concerns.
Communities like Coronationville and Westbury have been protesting for weeks over the lack of water.
Even wealthy suburbs are facing taps that run dry for long periods. For property owners, this has forced tough choices about where to invest.
Hyprop Investments, South Africa’s largest listed shopping centre property company, is shifting more into the Western Cape. Chief executive Morné Wilken said the difference in governance has become clear.
“We have been seeing much better progress in the Western Cape. The infrastructure is much better looked after. In terms of value, we are actually bigger in the Western Cape than in Gauteng,” he said.
Hyprop owns well-known malls such as Canal Walk, Somerset Mall, and Cape Gate. It recently bought Table Bay Mall in Cape Town and described it as a smart buy in a fast-growing residential area.
“We saw a huge opportunity because it was quite a new mall, the demographics were very strong, and where the rentals were, we saw a lot of growth to come,” Wilken explained.
Tenant turnovers at the centre grew 10% in the past year, and Hyprop now plans expansions at Somerset Mall, Cape Gate, and Table Bay Mall to meet demand.
In Gauteng, the picture is very different. Hyprop has had to step in to cover for failed municipal services.
“Unfortunately, what we had to do in Gauteng was actually backup water supply. Obviously, solar has been driving quite a lot, but it’s all beneficial to our tenants and the shoppers coming to the centres,” Wilken said.
The company also pays to repair roads, fill potholes, and improve security. These costs are incurred on top of high municipal rates.
“It just costs you much more. Over and above that, you still have a high cost of rates that you have to pay. But it is what it is, you need to adapt or leave, so we’re adapting.”
Western Cape’s growth in 2025
Hyprop is also reshaping its Gauteng portfolio, selling Hyde Park Corner while keeping Rosebank Mall, which is performing well since offices reopened.
Despite this, its biggest growth bets remain in the Western Cape. “We want to make sure our malls are relevant and actually attract customers, and the Western Cape is where we’re seeing the strongest opportunities to do just that,” Wilken said.
Growthpoint Properties, the country’s biggest property group, is also cutting back in weak areas. It has been selling office and retail space in what it called “deteriorating nodes” and CBDs while focusing its spending in stronger regions.
Since 2017, it has sold 40 office buildings worth R5.5 billion and 29 retail centres worth R3.9 billion.
In 2025 alone, it sold R1.4 billion in office and retail properties. At the same time, Growthpoint is also investing heavily in the Western Cape, spending R1.6 billion on projects, including R161.4 million to redevelop Bayside Mall in Table View.
Recent property data supports this emerging trend. Lightstone noted that the Western Cape accounts for nearly 31% of all property transaction value in South Africa, even though its GDP is less than half that of Gauteng.
The province also tops national governance rankings and has steady growth across farming, finance, business services, and real estate. This means investors are putting their money where services are reliable and growth is real.
That means the Western Cape, where companies like Hyprop and Growthpoint are building while steadily withdrawing from places that can no longer guarantee basic services.
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