Multifamily rental housing is now one of SA’s most resilient and investable property sectors

These insights were shared at a recent South African Multifamily Residential Rental Association (SAMRRA) multifamily sector institutional capital breakfast in partnership with Absa, held at Africrest’s The Legacy in Oaklands, Johannesburg.

SAMRRA is the industry body representing institutional owners and stakeholders in purpose-built residential rental housing in South Africa, with a mandate to grow the asset class through data, research and sector collaboration. Its members represent an estimated R40bn in assets nationwide, comprising around 75,000 housing units.

Further positive data was presented by Kobus Lamprecht, chief economist at Rode Publications & Media, who outlined improving macroeconomic conditions and their impact on property markets. He pointed to easing power supply constraints, improving sentiment from ratings agencies, stronger commodity prices and a firmer rand as factors supporting property fundamentals.

Lamprecht also shared early findings from the ongoing Rode and SAMRRA collaboration, which is tracking the performance of members’ multifamily portfolios on a quarterly basis, starting in August 2025. The survey currently covers around 60,000 residential units, making it the most comprehensive dataset available for the multifamily sector. Two thirds are in suburban areas and one third in CBDs. The portfolios are predominantly Grade A, purpose-built rental assets, owned and managed by institutional investors.

Vacancy rates across SAMRRA members’ portfolios have remained stable and are lower than those of non-SAMRRA apartments. SAMRRA’s occupancies remained above 95% for the three quarters tracked, reflecting the impact of more modern stock, dedicated amenities and professional management at scale.

Location influenced vacancy outcomes, with variations evident between CBD-based and suburban developments, which show slightly lower vacancy levels.

Nationally, apartment rental growth averaged 3.6% in 2025, close to consumer inflation, with the decline in interest rate constraining rental growth. However, the same interest rate environment is supporting capital values, contributing to overall market stability.

The Western Cape continues to outperform, with rental growth outstripping inflation. Rental apartment vacancy rates in the province are consistently low across both SAMRRA-managed and non-SAMRRA-managed stock. Lamprecht said the Western Cape is still a small multifamily housing market in the SAMRRA sample compared to Gauteng but is expected to grow.

Kobus Lamprecht, chief economist at Rode Publications & Media, presenting key data trends shaping South Africa’s multifamily rental housing sector

Somaya Joshua, managing executive: Real Estate at Absa Corporate and Investment Banking, speaking on the resilience of multifamily rental housing

Increasing in significance for real estate investors

At the event, Somaya Joshua, managing executive: Real Estate at Absa CIB, noted the asset class’s defensiveness and strategic importance. “Multifamily rental housing is becoming one of the most resilient, investable and socially impactful asset classes in South Africa. It aligns with national priorities such as urbanisation, affordability, and inclusive growth – and Absa remains committed to backing this sector across economic cycles,” said Joshua.

Joshua added that multifamily rental housing is increasingly becoming an important component of Absa’s real estate portfolio, reflecting the bank’s through-the-cycle confidence and long-term strategic alignment.

Opportunity at scale

From an investor perspective, Kamogelo Leeuw of the Sanlam Investments Property Impact Fund highlighted the scale of opportunity underpinning the sector. Sanlam has identified a housing shortfall of approximately 3.7 million units within the ‘missing middle’ market alone, while delivery rates of low-cost housing have declined sharply in recent years. The missing middle, defined as households earning between R5,750 and R36,000 per month, represents up to 30% of South African households and more than 60% of the country’s tax base.

“Multifamily rental housing provides a scalable, repeatable model that links stable, needs-based demand with long-term institutional capital. It can act as an anchor asset within integrated precincts, support inner city regeneration and densification, and create pathways for long-term household wealth creation,” Leeuw said.

Kamogelo Leeuw of the Sanlam Investments Property Impact Fund, highlighting the investment opportunity in South Africa’s multifamily rental housing market

Palesa Mkhize, CEO of SAMRRA, hosting the institutional capital breakfast and reinforcing the importance of credible sector data and research

Palesa Mkhize, CEO of SAMRRA, noted that the organisation was established to help institutional investors better understand and engage with multifamily residential as an investable asset class.

“While some investors have been active in this space for decades, for others it is still relatively new. What is clear is that multifamily rental housing is growing rapidly and is increasingly recognised as a core component of South Africa’s real estate landscape. Credible, consistent data is essential to support informed investment decisions as the sector continues to mature,” said Mkhize.

SAMRRA’s collaboration with Rode aims to address data gaps in the South African multifamily rental housing market.

Mkhize concluded: “The research we are developing with Rode is still in its early stages, but it already demonstrates the strength and resilience of professionally managed portfolios. We look forward to expanding this data set further and continuing to support investors, lenders and developers as this asset class grows.”