South Africa’s removal from the Financial Action Task Force (FATF) grey list has injected a much-needed dose of optimism into the economy, with the commercial property sector anticipated to benefit directly. This announcement shows that South Africa is back on the radar of global investors.
It restores credibility and lowers perceived risk, both of which are critical for property investment and development, and is a pivotal moment for investors looking to capitalise on reawakening market sentiment.
Getting out of the Grey
In February 2023, South Africa was placed on the FATF grey list due to shortcomings in anti–money laundering and counter–terrorism financing frameworks. This increased international scrutiny has raised our borrowing costs and complicated cross-border transactions.
However, over the past 18 months, government, regulators, and the private sector have worked to address these deficiencies, introducing key reforms that provide greater transparency around beneficial ownership, tighter supervision of non-financial sectors such as real estate and law, and a stronger enforcement environment under the Financial Intelligence Centre.
These collective efforts have paid off, with the delisting showing that South Africa can meet international standards. The benefits of that coordination will now ripple through the economy, starting with property.
An improved climate for investment
The immediate outcome of South Africa’s grey-list exit is an improved risk rating. This means a more favourable environment for businesses and investors, particularly in capital-intensive sectors such as commercial property.
Access to finance becomes easier, foreign capital inflows face fewer barriers, and transaction timelines shorten.
This renewed confidence is likely to prompt further infrastructure upgrades across logistics, ports, and transport, enhancing the long-term case for commercial property investment, while investors who previously hesitated due to compliance uncertainty are likely to re-engage.
As global interest returns, South Africa’s established property nodes, such as Johannesburg’s northern suburbs, Cape Town’s CBD and waterfront, and Durban’s logistics corridor, will undoubtedly experience increased demand.
Commercial sector prepares for growth
The commercial property sector has shown remarkable resilience in recent years. While the pandemic and macro-economic challenges impacted office and retail performance, industrial, logistics, and mixed-use assets have outperformed expectations.
The stabilising of inflation, moderating interest rates, and improved energy reliability have also better positioned South Africa’s property market for its next growth phase, with the commercial sector showing incredible promise.
This was noted in the South African Property Owners Association’s Office Vacancy Report Q1 2025, which showed that vacancies were easing, while prime-grade space improved to 6.8%, reflecting a sector firmly in recovery.
The market is in an upward trajectory, and the timing of South Africa’s delisting could amplify that momentum. This is expected to drive a renewed appetite for income-producing assets and development opportunities that align with sustainability, accessibility, and long-term tenant demand.
Why now is the time to invest
While the grey-list exit is not a silver bullet for all economic challenges, it removes a major hurdle that had been influencing sentiment.
The benefits will take time to filter through, but they create an enabling environment for deal-making. There is already strong interest in well-located commercial assets that offer secure income streams and growth potential, which is the right mix for investors.
Leasing activity has also begun to strengthen as businesses return to physical offices and hybrid models stabilise, with the latest PayProp Rental Index indicating tenant arrears are at their lowest, dropping to 16.9% nationally.
Because of this, well-positioned properties near transport links, lifestyle amenities, and residential hubs – such as Houghton, Hatfield, and Century City – are now gaining significant attention.
It is anticipated that the commercial segment will remain highly active, as investors move to capitalise on the positive momentum. Auctions provide a transparent and efficient way to acquire these quality assets while sentiment is rising.
WRITTEN BY JOHN JACK
John Jack is a real estate expert.
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