MAIN IMAGE: Palesa Mkhize – SAMRRA CEO
SAMRRA
Multifamily rental housing is emerging as one of South Africa’s most resilient and strategically important property sectors, driven by sustained demand, improving economic fundamentals and growing institutional participation. Purpose-built rental stock is increasingly viewed not only as a defensive investment, but as a response to structural housing shortages, affordability pressures and ongoing urbanisation.
Institutional scale and professional management underpin performance
Recent sector data from the South African Multifamily Residential Rental Association indicate a maturing asset class, underpinned by scale, professional management, and consistent performance. SAMRRA represents institutional owners with an estimated R40 billion in assets nationally, comprising around 75,000 residential units, largely Grade A, purpose-built rental developments.
Macroeconomic tailwinds support rental fundamentals
Macroeconomic conditions are also becoming more supportive of multifamily investment. Kobus Lamprecht, Chief Economist at Rode Publications & Media, highlighted easing power supply constraints, improving ratings agency sentiment, firmer commodity prices and a stronger rand as factors bolstering property market fundamentals.
Lamprecht shared early insights from an ongoing Rode and SAMRRA collaboration to track multifamily portfolio performance quarterly, starting in August 2025. The dataset, currently covering approximately 60,000 residential units, is the most comprehensive of its kind in South Africa. Around two-thirds of these units are located in suburban areas, with one-third in CBDs, and are predominantly owned and managed by institutional investors.
What the data shows: occupancy, location and rental growth
Vacancy rates across SAMRRA members’ portfolios have remained consistently low, with occupancies above 95% across the three quarters tracked. These levels are notably stronger than those recorded in non-SAMRRA apartment stock, reflecting the appeal of modern units, integrated amenities and professional management. Location continues to influence outcomes, with suburban developments showing slightly lower vacancy levels than CBD-based stock.
National apartment rental growth averaged 3.6% in 2025, broadly in line with consumer inflation. While declining interest rates have constrained rental escalation, the same environment has supported capital values, contributing to overall sector stability. The Western Cape remains a standout performer, with rental growth exceeding inflation and persistently low vacancy rates across both SAMRRA-managed and non-SAMRRA stock. Lamprecht noted that although the province currently represents a smaller share of SAMRRA’s sample than Gauteng, it is expected to grow in significance.
Why multifamily is attracting long-term capital
From a funding perspective, the sector’s defensive qualities are attracting increased institutional attention. Somaya Joshua, Managing Executive: Real Estate at Absa Corporate and Investment Banking, said multifamily rental housing aligns strongly with both investment and national development priorities.
“Multifamily rental housing is becoming one of the most resilient, investable and socially impactful asset classes in South Africa. It aligns with national priorities such as urbanisation, affordability, and inclusive growth — and Absa remains committed to backing this sector across economic cycles,” said Joshua.
She added that multifamily rental housing is playing an increasingly important role within Absa’s real estate portfolio, reflecting long-term confidence in the asset class.
The missing middle drives demand at scale
For long-term investors, the scale of unmet demand remains a powerful driver. Kamogelo Leeuw of the Sanlam Investments Property Impact Fund pointed to an estimated housing shortfall of around 3.7 million units in the missing middle market alone. This segment, defined as households earning between R5,750 and R36,000 per month, accounts for up to 30% of South African households and more than 60% of the national tax base.
“Multifamily rental housing provides a scalable, repeatable model that links stable, needs-based demand with long-term institutional capital. It can act as an anchor asset within integrated precincts, support inner city regeneration and densification, and create pathways for long-term household wealth creation,” said Leeuw.
From housing solution to core portfolio asset
According to Palesa Mkhize, CEO of SAMRRA, the organisation was established to support institutional investors navigating a rapidly expanding sector that remains data-constrained.
“While some investors have been active in this space for decades, for others it is still relatively new. What is clear is that multifamily rental housing is growing rapidly and is increasingly recognised as a core component of South Africa’s real estate landscape. Credible, consistent data is essential to support informed investment decisions as the sector continues to mature,” said Mkhize.
She added that the ongoing collaboration with Rode is beginning to close long-standing data gaps. “The research we are developing with Rode is still in its early stages, but it already demonstrates the strength and resilience of professionally managed portfolios. We look forward to expanding this data set further and continuing to support investors, lenders and developers as this asset class grows.”
