Business investment points to positive signs for South Africas economy

South Africa continues to face its share of economic challenges, but there’s also a growing list of reasons for optimism. From major automotive investments and manufacturing upgrades to retail expansion and new businesses taking over established facilities, companies are continuing to invest in the South African market. These developments point to confidence in local production, consumer demand and the country’s long-term economic potential. 3Cube Property Solutions takes a closer look at these developments and what they could mean for the property market.

Big investment in South Africa’s automotive sector

South Africa’s automotive manufacturing sector is continuing to attract significant investment, with major companies upgrading established facilities and preparing them for the next generation of production. In the Eastern Cape, Volkswagen Group Africa has committed R4 billion to its Kariega plant[RC1] , where upgrades are being made ahead of the introduction of a third model, the entry-level Tengo crossover, from 2027. where upgrades are being made ahead of the introduction of a third model, the entry-level Tengo crossover, from 2027. where upgrades are being made ahead of the introduction of a third model, the entry-level Tengo crossover, from 2027. where upgrades are being made ahead of the introduction of a third model, the entry-level Tengo crossover, from 2027.

In KwaZulu-Natal, Dunlop Tyres South Africa has completed a R1.7 billion upgrade of its uMnambithi (formerly known as Ladysmith) plant, bringing new technology and increased production capacity to the facility. The modernisation is aimed at strengthening the plant’s ability to supply the local automotive industry and regional export markets, while supporting the shift towards new-energy vehicles. Together, these investments highlight the continued importance of upgrading South Africa’s existing manufacturing infrastructure to keep pace with a changing automotive industry.

There is also significant activity around Gauteng’s automotive manufacturing infrastructure. In July, Chinese automotive giant, Chery Holding Group, completed its acquisition of Nissan’s former Rosslyn plant. The facility is now being prepared for a new phase of production, with Chery Holding Group’s Jetour brand expected to begin local vehicle production there in 2027. The company has said the operation could create more than 3 000 jobs across manufacturing and the wider supply chain.

Meanwhile, Toyota South Africa Motors is investing R10.4 billion in its Durban plant as part of the production programme for the ninth-generation Hilux. The expansion includes a new logistics centre as well as state-of-the-art chassis frame coating and welding facilities, with the latter being scheduled for completion in 2027. 

Taken together, these investments point to more than simply a healthy automotive sector. They show companies modernising, expanding and repurposing South Africa’s industrial infrastructure, creating demand not only for manufacturing facilities but also for logistics, warehousing, suppliers and other supporting commercial property.

Retail expansion points to continued consumer demand

The positive signs aren’t limited to the automotive sector. South Africa’s retail industry is also seeing companies invest in new formats, new locations and renewed expansion. Clicks, for example, has launched KwaMakhi, a new neighbourhood convenience format aimed specifically at township markets. The first store opened in Tembisa in August, followed by stores in Hammanskraal, Khayelitsha and Cravenby, with the retailer targeting 10 stores by the end of 2026.

Edgars is also moving from a period of contraction into expansion, with plans to open 50 new stores over the next two years. This follows a three-year turnaround during which the retailer reduced its retail space by more than 100,000m², focusing on smaller, more productive, community-based stores. The new rollout suggests that the strategy is now creating room for growth, while also generating renewed demand for retail space.

Woolworths is also strengthening its position in South Africa’s food manufacturing and supply chain through its potential acquisition of in2food, a major local supplier of convenience foods. The deal brings in2food’s eight manufacturing facilities into the Woolworths group and is intended to strengthen supply chain resilience, improve efficiency and support further growth across food retailing, food services and export markets. The prospective acquisition provides another example of a major South African retailer investing further in local production and the infrastructure that supports it.

For the commercial property and industrial sectors, these developments are significant. Retailers expanding into new communities need physical stores, distribution networks and supporting logistics infrastructure. While consumer spending remains under pressure, the willingness of established retailers to expand their footprints and adapt their formats points to opportunities within South Africa's retail property market.

What does this mean for South Africa’s property and industrial sectors

For South Africa’s commercial and industrial property sectors, these investments have implications that extend well beyond the companies making them. A new or upgraded manufacturing facility creates demand for warehouses, distribution centres, logistics infrastructure and space for suppliers, while increased production can bring further activity throughout the surrounding industrial ecosystem. The same applies to retail expansion, where new stores require suitable commercial locations and reliable supply chains to support them.

These developments do not mean that South Africa’s economic challenges have disappeared, but they do provide tangible signs of businesses continuing to invest, adapt and plan for the future. From automotive manufacturing and logistics to retail and distribution, this investment is creating demand for the physical infrastructure needed to support growth. As businesses expand, the need for well-located, flexible and fit-for-purpose space will continue to evolve.

If your business needs commercial, industrial or retail space in Gauteng or the Western Cape, get in touch with 3Cube Property Solutions.