Africa -  South Africa - Johannesburg

Ramaphosa’s proposals to revitalize the country in 2018 sounded promising and following the excitement of a change in presidency, the GDP grew by 2.6% and 1.4% in the last two quarters of 2018 respectively. 2019 saw a sharp decline in GDP in the first quarter of just over 3% reflecting in part the effects of Eskom’s power cuts on mining and manufacturing. While there was a growth of over 3% in the second quarter, the South African Rand and the general economic sentiment remains bleak amidst the global economic slowdown and the USA China trade war.

National elections took place on the 8th May 2019 and the ANC won with 57.5% of the count which was its worst performance by the party in any national election. There were just a few service delivery protests leading up to the elections and on election day, otherwise it was a peaceful turnout.

Johannesburg on the other hand benefits from corporate travel rather than leisure. This has led the city to remain South Africa’s most powerful commercial centre. The Hotel market in Johannesburg continued to struggle in 2017 with a decline of 1% in guest nights but an improvement on the 4% decline of 2016.  Hopefully this indicates the market has reached the bottom of the occupancy cycle and will now start to increase. The Johannesburg market is expected to rebound in the coming years as the economic conditions improve.

The continued development of new offices will lead to increased demand for hotels, especially in commercial hubs like Sandton and Rosebank. It is also important to note that the fluctuations in the exchange rate of the South Africa Rand has a huge impact on hotel performance.

A new “Diversity Property Fund “committed R12 billion to the redevelopment of the inner city. The first phase of retail commercial and residential space in the Jewel City Precinct is expected to come to the market in the 3rd quarter of 2019. Some of the major developments in Sandton scheduled to be launched in 2019 include the Advocates and 129 Rivonia Road, which is partially open to rent already. On the supply side, Marriott Melrose Arch is expected to open in 2021, Hilton is planning to open a 30-room Curio Collection in 2021 and Radisson will open a Radisson RED Rosebank also in 2021 with 222 rooms.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

South Africa - Johannesburg RevPAR Change

South Africa - Johannesburg RevPAR

Year RevPAR
2015 64.90
2016 64.60
2017 70.10
2018 71.30
2019 (f) 68.00
2020 (f) 70.70
2021 (f) 66.60

For more information, please contact:

Tim Smith, MRICS
[email protected]
  • +27 797 342296 (w)
Rishabh Thapar
[email protected]
  • +27 0 792790584 (m)
Laura Dutrieux
[email protected]