South Africa’s property market is seeing a major shift as leading players Pareto and Divercity Urban Property Group move ahead with an R850 million residential redevelopment in Menlyn, Pretoria. The two companies have started work on converting ageing office space at Menlyn Office Park into more than 1,200 new rental apartments. Many experts say this reflects how demand for housing has overtaken the market for traditional office space across the country. Empty offices are becoming a common sight while rental accommodation in central locations continues to attract buyers, tenants and investors.
The project is designed to deliver a modern living environment where people can easily walk to shops, transport and workplaces. Of the 1,200 apartments, 460 units are coming from refurbished office buildings while an additional 740 new units will be built in four high-rise blocks of up to ten floors. Construction is already ongoing as the developers work to create what they describe as a vibrant community close to one of South Africa’s busiest malls, Menlyn Park Shopping Centre.
For Pareto, which owns major retail assets such as Sandton City, Cresta, Tyger Valley, Pavilion and Menlyn Park, this marks its first residential entry despite its large investment portfolio. Pareto Chief Executive Officer, Malose Kekana, said the new direction shows how modern urban life is changing. According to him, people now want homes close to commercial hubs and efficient transport networks. He said the project demonstrates the company’s commitment to shaping Menlyn’s future as a connected, mixed-use node.
The move also reflects a wider trend in South Africa’s real estate sector where more investors are turning to multifamily rental housing as a strong investment option. The Government Employees Pension Fund owns Pareto, while the Public Investment Corporation manages it. Earlier in the year, the PIC invested in Divercity, reinforcing confidence in the company’s ability to deliver on large urban housing projects.
Divercity was selected as the residential development partner after a competitive process. The company is well-known for successful affordable rental projects across major cities including Jewel City and Barlow Park. Divercity Chief Executive Carel Kleynhans said they are proud to lead the residential component of the Menlyn redevelopment. He noted that demand for homes in Menlyn has grown because of its position near Menlyn Park Shopping Centre and Menlyn Maine – two developments that attract residents and businesses.
The Menlyn Office Park site, originally bought from Old Mutual Property, is just off Lois Avenue and close to major N1 interchanges at Atterbury and Garsfontein. Its long-term tenants included Standard Bank and Voetspore. The location is also within walking distance from Gautrain bus stops and Menlyn Maine Central Square. Analysts believe these features make the new estate attractive for renters seeking convenience, shopping, and easy access to jobs.
According to the companies, the apartments will be built within a green and tree-rich environment and surrounded by more than 400 shops, restaurants and services. The redevelopment highlights a deep change in city planning where outdated office buildings are being transformed into liveable communities that reduce travel time and boost urban density. Industry observers say it mirrors practices in international property markets where mixed-use districts and urban living models are strongly supported.
South Africa’s rental housing market shows strong performance indicators. Divercity is a founding member of the South African Multifamily Residential Rental Association. The association controls over R40 billion in assets and more than 75,000 rental units nationwide. Reports from the first quarter of the year showed occupancy at 95.8 per cent and bad debt at below one per cent, indicating high demand and favourable returns for investors. Experts say the challenge now is to provide more stock to meet the growing appetite.
Across major cities including Johannesburg, Cape Town, Durban and Pretoria, there is more conversation around converting vacant office buildings into homes rather than letting them deteriorate. The Menlyn redevelopment aligns with this growing momentum and signals confidence in Pretoria’s residential market. Property developers, analysts and pension fund managers say the shift from office to residential could support job creation, boost rental supply and increase long-term value for investors.
As construction continues at Menlyn Office Park, attention will remain on how quickly units are taken up and whether more landlords follow suit by repurposing dormant office buildings for housing projects. The transformation is expected to influence urban policy, financing frameworks and long-term commercial property investment strategies in South Africa. Many believe the Menlyn model could be repeated in other centres where offices remain empty but rental demand remains high.
