Johannesburg – Investors are turning to bricks and mortar, not as finished income but to generate investment or development returns and hold for rental or sales, reveals Greg Dart, a director of The High Street Auction Co, a pioneer in the South African auction space.
Although the auction platform is often associated with big ticket properties, the upcoming auction to be held on 19 February 2026 at the Bryanston Country Club talks to investment in a critical residential property segment referred to as “the missing middle” – families that earn too little to buy their own properties and too much to qualify for government housing.
While the Department of Human Settlements acknowledges the critical shortage of affordable housing units – said to top 3.7-million units – and is considering a housing subsidy scheme, private investors are also tapping into this gap.
As a result, according to both Dart and High Street Auction Co associate director, Harrison Chabana, this very important market segment is opening up.
Meeting in the middle
An example that could well sell before coming under the hammer is a fully tenanted portfolio of 37 units within a multi-family residential property in Centurion, which has drawn considerable interest from large corporate investors who have already undertaken multiple repeat viewings, said Chabana.
High Street Auction Co recently sold 60 units in a neighbouring complex for the same investor who is liquidating his portfolio ahead of retirement.
Chabana said that Centurion is particularly suited to affordable housing as it is central and close to office parks.
Demand is high.
“When one tenant moves out, there is instant interest from those on the waiting list. They have not had a vacancy for the past four years,” said Chabana.
He says investors are actively looking for prominent central developments where they can retain existing tenants or even take them further.
“There are similar properties available, not only in Limpopo, but in other centres,” Chabana said.
“We are seeing the launch of new developments now.
“This market is growing. It is definitely an asset class that is doing well.”
The 37-unit bulk sale features two-bedroomed units measuring 91sq/m and three-bedroomed units measuring 122 sq/m – a perfect fit with what are now formally referred to as multifamily rentals.
The South African Multifamily Residential Rental Association (SAMRRA) and Rode Publications & Media are collaborating to track the performance of its members’ multifamily portfolios on a quarterly basis.
Two-thirds of the 60 000 residential units 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 are stable with occupancies above 95%, reflecting the positive impact of more modern stock, dedicated amenities, and professional management at scale.
“We are seeing the preeminent developers and investors engaging with this particular asset class, backing up the belief that multifamily residential rental property is now one of South Africa’s most resilient and compelling real estate investment opportunities,” Dart adds.
“Both banks and investors are therefore tracking and engaging aggressively on these types of assets.”
On the side
Closely aligned with this is student accommodation.
The February 19 auction sees fully tenanted NSFAS-accredited facilities in Nelspruit, Pretoria North, and New Doornfontein also drawing significant investor attention.
“The student accommodation sector remains buoyant. Most facilities have recruited for this new academic year,” Dart notes.
“Vacancies are down, and the new term is starting.
“So, student accommodation for accredited facilities that have good tenancy are certainly continuing to find real traction in the marketplace.”
Another top performer is township retail, which remains very buoyant, especially when outlets are occupied by retailers selling essential products and services in areas where people do not have discretionary income.
Properties featuring in the February 19 auction include the Marula Square Shopping Centre in Onverwacht, Limpopo, and the KwaNokuthula USave anchored Retail Centre in Plettenberg Bay, which has a gross annual income of R2.1-million.
Also, up for auction are development land parcels in Edenvale and Pretoria North.
“We did not have a lot of traction on development parcels last year,” Dart said.
“Many developers land banked are now overweight and trying to liquidate assets.
“There have been problems with service delivery off take and affordability issues.
“We still haven’t seen the full impact of interest rate cuts.
“Yet, we are now seeing a lot of interest in the land offerings,” says Dart.
High Street remains very active in the Western Cape and is working to build up stock here.
The February 19 auction features a beautiful Langebaan home that has been used as a guest lodge and is a turnkey opportunity: “We are not selling it as a growing concern, but you can buy the home, plus all the assets, and continue trading as a guest home if you wish,” he explains.
Future auction prospects
Dart remains optimistic about 2026: “There is definitely movement in the marketplace. Buyers are engaging, and we are certainly hoping for a strong auction on February 19.
“We have navigated through a tough 2025, seen the GNU take shape, the energy crisis disappears into the rear-view mirror, interest rates materialise, and we are off the grey list.
“There are lots of triggers for improved sentiment, and we look forward to seeing this manifest in the trading on the floor.”
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