
Sandton, the business centre of South Africa may not actually reach its commercial heights last enjoyed before the pandemic, because brokers just can’t convince enough people to work in the hundreds of glass offices sprawled across the suburb. Depending on who you ask, the business centre and central suburb called Sandton is at least 35% vacant in terms of office space. This is a staggering number and doesn’t even include surrounding areas which are designated as being part of the greater Sandton area: Hyde Park and Bryanston.
During the initial economic lockdowns, many skilled workers learned how easy it was for them to adjust to working from home. They tended to own computers which could handle the tools they needed to work, which was often just word processor and office software and online meeting programmes such as Zoom, MS Teams and Google Meet. As a result, some small and medium companies started to ask their landlords if they could rent less space. These companies found that they were dictated to by their employees. This is because skilled talent can call the shots at smaller entities.
This is while large companies and multinationals can be strict with their employers and say that their jobs have strict working conditions because these employees may be fairly easy to replace. But it’s largely a battle for landlords and the brokers they work with.
Given that many employees have realised that they don’t have to work inside offices anymore, to change their minds, offices have to offer enticing aspects. Employees may want high-end canteens, fancy bars, gyms and entertainment rooms in their offices. This comes with heavy costs for landlords. It might be feasible if the landlord is placing a large tenant who can afford a hefty rental. But many landlords just cannot make their offices into hotels. These are workplaces and not hotels.
So, what could improve Sandton’s chances of becoming the high-end commercial epicentre of Johannesburg that it once was? The obvious answer is that we need economic growth accompanied by job creation. Companies will employ if they find skilled people to employ. If they need a large workforce, they may well need a large office. If a multinational comes to SA to build a power station, they’ll need a support office. So, in a few years’ time, we could see demand for large offices but by then the rentals may have come under heavy pressure as other nodes gain in popularity.
Ultimately, Sandton has to evolve with the times. Like so many areas in greater Johannesburg, Sandton was developed out of farm land. But it wasn’t planned. Sandton City was a super regional mall built to support the urban sprawl in the area. But over the years it became an office node during the week and rather empty on the weekends. Not many people who worked in these glass mega structures in Sandton, actually lived there. I used to joke that Sandton was a working node for migrant labour. The only busy things on the weekend were Sandton City and Nelson Mandela Square. The offices aren’t supported by retail stores at their base. Sandton is barely pedestrianised. Now as millennials exit their youth and look to own property that offers them lifestyle benefits and investment returns, Sandton has to step up. Landlords are trying to convert offices to housing where appropriate while developers are creating residential schemes in the commercial pearl of Gauteng.
But office owners will need to be highly creative in prime nodes such as Sandton and Rivonia and consider converting offices into buildings for other uses beyond retail. These could include storage facilities, events spaces and even laundromats. This is as Sandton is forced to accommodate new kinds of residents and businesses. If it wants to be a thriving node again, it has to accommodate a wider mix of people in terms of wealth and actually become Johannesburg’s premium central business district.