Mega-offices in South Africa’s richest city are being converted into homes

Johannesburg is undergoing a major urban shift, with a growing share of office buildings being converted into residential and mixed-use developments.

For years, the narrative surrounding Johannesburg’s commercial sector has been one of distress as vacancy rates soared, iconic buildings stood empty, and investors looked nervously towards the Cape.

However, a significant structural shift has been taking place. According to Lew Geffen Sotheby CEO Cobus Odendaal, the city is witnessing a mass shift from commercial to residential.

Nearly one in five office purchases nationally are now intended for residential or mixed-use conversion, but in Johannesburg, this figure skyrockets to an estimated 38.1%.

Odendaal said this is not merely a symptom of a broken office market, but a strategic, market-led solution to two of South Africa’s most pressing urban challenges: an oversupply of outdated commercial space and a critical shortage of well-located housing.

Odendaal said he’s seen a fundamental shift in buyer and investor sentiment. “We are no longer just selling properties – we are witnessing the repurposing of the city,” he said.

“The question is no longer if these conversions will happen, but how we can navigate the complexities to ensure they create sustainable, inclusive, and vibrant urban communities.”

He acknowledged that it is tempting to attribute the glut of office space to the pandemic-induced shift to remote work.

However, productivity improvements driven by technology have allowed office-dependent sectors to grow without proportionally increasing their workforce numbers, according to independent economist John Loos.

He believes the challenges predate Covid-19, with digitisation reducing the need for physical document storage, further lowering space requirements.

“His view is that the pandemic simply accelerated an inevitable restructuring,” Odendaal explained.

According to Odendaal, the result has been a prolonged period of oversupply. The national office vacancy rate peaked at 18.2% in 2021/22.

While it has since improved, Gauteng remains under significant pressure, with Johannesburg’s vacancy rate still hovering above 14%.

“This surplus is concentrated in older B and C-grade buildings – precisely the stock now being targeted for conversion,” Odendaal said.

Office-to-residential boom reshapes Johannesburg – but challenges remain

Odendaal said the most exciting aspect of this trend is its potential to correct South Africa’s spatial inefficiencies. “The rise of mixed-use developments is allowing for a return to a more integrated, live-work-play model,” he said.

“One major project example is Barlow Park in Sandton, where a former corporate park is being reimagined as a ‘city within a city’, offering affordable apartments alongside retail, schools, and recreational facilities.”

Odendaal explained that the trend is being driven by economic pragmatism. While Cape Town’s property prices have surged by 25% over the past five years, Johannesburg’s have only seen a 12% increase.

“This affordability gap is now prompting a wave of ‘reverse semigration’. We are fielding a growing number of inquiries from people looking to move back to Johannesburg, particularly for high-end properties,” he said.

“They are realising that our city offers exceptional value and a quality of life that is being enhanced by these very urban regeneration projects.”

However, Odendaal made it clear that converting a 1980s office block into a desirable apartment building is not without its hurdles.

Developers face a gauntlet of practical and regulatory challenges. This includes a complex legal landscape regarding zoning and regulations.

A recent Supreme Court of Appeal case involving a rezoning application in Durbanville confirmed that municipalities are entitled to adhere strictly to their Spatial Development Frameworks.

This means developers must convincingly justify any deviation from these plans. It is a reminder that successful conversion requires not just capital and vision, but also deep expertise in navigating municipal planning processes.

Old office buildings also often present significant structural challenges. Deep floor plates, for instance, can leave new apartments without access to natural light and cross-ventilation.

However, international case studies show these challenges can be overcome. In Sydney’s Blue at Lavender Bay development, architects shifted the building’s core to allow for natural light.

In New York’s SoMA project – the largest office-to-residential conversion in the United States – designers inserted two light wells to make the deep floor plates habitable.

However, Odendaal added that infrastructure strain is perhaps the most contentious issue developers of these projects are facing.

For example, in the proposed Joshco development in Kelvin and the massive Bankenveld City project, residents often raise legitimate concerns about water throttling, electricity capacity, and traffic congestion.

These are not simply NIMBY (Not In My Back Yard) issues to be dismissed, Odendaal said. They are critical tests of municipal capacity.

For any conversion to succeed, it must be accompanied by developer-funded upgrades to bulk infrastructure and a clear commitment from the City to maintain and improve services.

Office conversions surge globally

This movement is not unique to South Africa, Odendaal said. Globally, the rise of remote work and the ongoing housing shortage have led to a surge in office-to-residential conversions.

In the United States, the number of apartments carved out of former office space tripled from 23,100 in 2022 to 70,700 in 2025.

From Detroit’s historic Book Tower to Amsterdam’s De Voortuinen, cities worldwide are finding creative ways to breathe new life into obsolete buildings.

Odendaal said the 38.1% of Johannesburg office purchases destined for conversion is a declaration of intent for the city’s future.

“It signals that the private sector is ready to invest in a new vision for our city. However, the success of this urban regeneration will depend on a collaborative effort,” he said.

“We need municipalities to provide clear, consistent, and streamlined approval processes that balance community concerns with the urgent need for housing and investment.”

At the same time, Odendaal said South African developers need to commit to high-quality design and sustainable building practices.

“And as industry leaders, we need to champion these projects, communicating their long-term value to investors, residents, and the broader community,” he said.

He said the future of Johannesburg is not in sprawling, car-dependent suburbs or isolated commercial precincts. Rather, it lies in creating dense, connected, and inclusive neighbourhoods where people can live, work, and play.

“The conversion of our office stock is the most powerful tool we have to build that future. The market has made its move. Now it’s time for all stakeholders to get on board,” he said.