Commercial properties tenanted by medical facilities and practices are top performers within South Africa’s commercial property space. On the back of the beginnings of a resurgence in the overall commercial property market, they are drawing a great deal of interest. This comes ahead of the company’s next auction on November 27 at the Bryanston Country Club in Johannesburg.
According to High Street Auction Company director, Greg Dart, there is consistent demand for modern, high-quality buildings. These buildings not only align with modern tenant preferences. They have also been fitted to accommodate the needs of specific tenants. The medical sector is one of the few to remain stable throughout recent economic upheavals. It is a case in point when it comes to both consistency and unique requirements.
A healthy segment of the property market
He points out that investment in medical office buildings hinges on the fact that there is a growing demand for specialised facilities. Development of new medical facilities is ongoing on the back of continued pressure on private healthcare service providers due to the poor performance of public healthcare facilities and a substantial increase in demand due to the National Health Insurance (NHI) legislation in South Africa. Implementation of the NHI is still uncertain, but it is clear that the private sector will play an important role in service delivery.
Demand for healthcare services is not only consistent but actually growing due to the aging population and the increasing prevalence of chronic diseases.
Thus, in the medical fraternity, investors in bespoke properties are likely to benefit from long-term leases from high profile tenants which ensure a reliable income stream and longer lease periods which are automatically adjusted for inflation.
“When it comes to medical facilities, location is key with accessibility to complementary service providers creating hubs which elevate the investment value of certain properties. Healthcare service providers – especially those with established patient customer bases and a strong reputation within particular urban centres – tend to be the most financially stable tenants and landlords can look for to a lower-than-normal risk of rental defaults,” he adds.
A unique investment opportunity
Dart observes that it comes as no surprise that these investments come to market far less often than more conventional commercial office spaces. The High Street Auction Co sold two key facilities at the end of last year. One was a Life Healthcare-tenanted medical dialysis facility on the Durban Berea. Another was a Life Healthcare-tenanted medical dialysis facility at The Centenary on Meridian Drive, Umhlanga. Both were well-established clinics in prime locations. They had been purpose-fitted. Investors benefitted from longer term existing leases.
The same goes for the two facilities that will come under the High Street Auction Co hammer at the end of 2025. “The first is ideally situated in the established Sasolburg medical node. This well-maintained medical facility offers a sound investment opportunity with a strong national tenant in place. The property is occupied by Life Renal Dialysis, a division of Life Healthcare, under a secure lease agreement,” Dart explains.
The building is purpose-fitted for dialysis treatment and related healthcare services. It features high-quality internal finishes. It also includes backup utilities and ample parking for patients and staff. Its strategic location near other medical practices and amenities enhances accessibility. It also reinforces long-term investment stability.
“Medical property number two sits in central Vereeniging. Life Renal Dialysis occupies the building under a long-term lease. The developers purpose-built and customised it for dialysis treatment. The facility offers modern finishes and a functional layout. It also includes medical-grade infrastructure. The property provides parking for patients and staff. It offers easy accessibility. It is close to other healthcare providers. These features reinforce its suitability for long-term medical use,” Dart adds.
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A diverse auction offering
In addition to these two standout medical facilities, the upcoming High Street Auction Co event will feature five large industrial / warehousing spaces in Wadeville as well as similarly versatile industrial spaces in Industria, Lanseria and Meadowdale.
Hennie Bezuidenhout, CEO of Benchmark Group, specialists in medical real estate, reinforces Dart’s confidence in the market. “Investment in medical buildings in prime locations is delivering stable long-term returns. Demand for specialised, clinician-centred space keeps rising – private-sector providers are carrying more of the workload as public services struggle, and South Africa’s ageing population is growing, which increases healthcare utilisation. For investors, that translates into resilient occupancy, longer leases and robust lease commitments in well-located medical nodes. We have seen this first-hand. Our focus is to develop, acquire and manage facilities that improve patient access and provider efficiency – assets that perform operationally and financially over the long term.’
As reflected in First National Bank’s Property Insights for the third quarter, a rebound in property business broker confidence and the beginnings of a recovery of the office segment of the commercial property market are bringing quality investment opportunities to the market – in this case, office spaces in Parktown, Centurion and Sandton.
Dart is confident that this positive trend will continue for the remainder of the year and into 2026 with continued strong performance in the industrial segment of the market and consistent recovery in commercial property.
