The FNB Commercial Property Finance – Property Insights notes that business confidence among commercial property brokers declined to 40%, down from 55% the previous quarter, signalling a pause in the recovery. Sales-activity ratings fell slightly across office (4.67), retail (4.47) and industrial (5.59) sectors.
FNB nevertheless expects mild strengthening later in 2025 as interest-rate cuts resume and GDP growth edges up to 1.1%. And according to a
2025 article from Real Estate Investor, companies are actively resizing their office footprints and favouring smaller, more flexible leases as hybrid work becomes standard in hubs such as Cape Town and Johannesburg.
Globally, this mirrors a long-term realignment. In the UK, Forbes Advisor found that 63% of workers operate remotely at least some of the time, and 57% would consider leaving their employer if flexibility were removed. In the US, the Owl Labs State of Hybrid Work 2025 report shows 28% of employees working hybrid, 9% fully remote, and 37% unwilling to accept jobs without flexible hours.
These numbers confirm a global pivot and South African landlords can respond by offering workspaces designed for flexibility, collaboration and convenience.
Shared working spaces have been on the rise in South Africa since before the pandemic. Taking Cape Town as an example, the Cape Town Central City Improvement District recorded 16 co-working spaces across the Central City in 2020.
By November 2025, while Business Insider Africa noted that Coworker.com listed 64 spaces in the metro, a quick Google Maps search showed close to 120 options across the CBD and southern suburbs.
This rapid growth stems from freelancers, start-ups, small businesses and hybrid employees seeking reliability, community and cost-efficiency. Instead of isolation of Work From Home (WFH) or long leases, individuals and startups want access to fully serviced communal environments (meeting rooms, shared utilities, secure parking and backup power) with the option to scale up or down as their business changes.
Johannesburg, Durban and other secondary cities are following suit as employers decentralise and professionals look for shorter commutes and better work–life balance.
While remote work has proved effective, many businesses acknowledge that certain functions thrive on physical interaction. Entry-level employees, collaborative teams and project-based roles benefit from in-person engagement.
Offices, including co-working environments, remain essential for onboarding, mentoring and relationship-building. As Paul Stevens, chief executive officer of Just Property explains, “The office isn’t disappearing. It’s being reinvented as a network of shared, flexible spaces that respond to how people actually work.”
For landlords, converting vacant or outdated offices into co-working hubs is both a creative and commercial opportunity. The most suitable properties tend to be older A- or B-grade buildings with good access and parking or mixed-use retail-office spaces that can be opened up for shared use.
Modern co-working models go far beyond shared desks. They combine hot-desking, private offices, meeting suites and event areas to encourage networking, innovation and collaboration. Sustainability and wellness are also shaping tenant decisions: companies increasingly prefer energy-efficient buildings that maximise natural light and include well-being features such as gyms or relaxation zones.
Conversion typically means reconfiguring interiors for open-plan layouts, introducing modular furniture, installing high-speed internet and ensuring strong security. Amenities such as coffee bars, bookable boardrooms and communal lounges add appeal and support premium desk rates.
Landlords can choose between partnering with an established operator or managing the space themselves. Partnerships provide proven systems and marketing reach, while self-management offers higher margins and greater control. Either way, the emphasis should be on creating a community that encourages repeat usage and long-term loyalty rather than one-off tenancy.
To model returns accurately, investors should obtain guidance on fit-out costs per m², typical yields compared with long leases, and average occupancy levels. Although upfront investment may be higher, the potential for consistent membership revenue and lower vacancy makes this model increasingly attractive.
“Nicholas Brodie, director at SBL Incorporated, furthermore points out that it is imperative that any potential restructuring of a property complies with the applicable municipal by-law and zoning permissions for the property.
"Failure to ensure municipal compliance can result not only in hefty fines, affecting the profitability of the investment itself, but in steps taken by the applicable municipal authority to ensure that contravening property owners cease operations.”
Compliance with health, safety and parking regulations is critical, and the inclusion of backup power and renewable systems is now an operational necessity. Landlords should also check for any urban-renewal or mixed-use development incentives that could improve financial feasibility.
Operating a co-working space differs from managing a traditional office building. Landlords will need efficient digital systems for access control and data security, membership management and billing, as well as a dedicated marketing strategy.
Consistent visibility, community engagement and customer service are essential for high occupancy. Security and cleaning are also important considerations, given the fluid nature of daily traffic, and landlords should budget for consumables and maintenance accordingly.
Flexibility is now fundamental to the future of work. South Africa’s co-working market may still be developing in some areas but the direction is unmistakable. By aligning property strategies with hybrid work realities, investors can transform idle buildings into profitable, people-centred assets that meet the evolving needs of business and society.
