According to Wesley Cowan, Director at Galetti Auction, “Sellers are increasingly turning to auctions as an efficient sales method, particularly in South Africa’s top-performing industrial property sector.”
Cowan refers to surging demand for industrial-zoned land, which continues to drive low vacancy levels and higher rentals – most notably in the Western Cape.
“Demand for commercial property in the Western Cape is exceptionally strong, especially across key asset classes like industrial, retail and hospitality,” he says. “In some cases, properties are selling before they even reach the market.”
Looking at the broader commercial property sector, Cowan notes industrial remains the top performer, delivering returns of around 15% (MSCI SA Property Index), with retail close behind, supported by improved consumer spending and salary growth. Office demand is also rising as interest rates ease and more employees return to workplaces. South Africa’s REITs are boosting momentum, recording a 2.4% monthly gain in August and lifting year-to-date returns to 14.2% (SA REITs Association Chart Book).
“With such high demand and limited supply, it’s easy to see why auctions have become an increasingly popular sales channel,” Cowan adds.
Opting for auction
Cowan notes that, while auction was once viewed as a last resort for dilapidated properties, it has fast gained ground in recent years for positive reasons. “In countries like Australia, auction is a standard method of sale and helps generate competitive prices,” he shares.
He highlights the following seller benefits:
- Competitive bidding creates urgency, leading to quicker transactions.
- Extensive marketing attracts a larger buyer pool, driving up prices.
- Transparent price discovery ensures fairness and often exceeds seller expectations.
- Non-suspensive contracts reduce the risk of deals collapsing.
- Flexible terms let sellers align conditions with objectives.
Cowan advises buyers to consider:
- Location – proximity to transport routes, ports and hubs.
- Correct zoning – compliance with local, environmental and safety regulations.
- Accessibility – space for heavy vehicles and machinery.
- Scalability – room for future expansion to boost resale value.
- Security and solar – reliable power, controlled access and protection for operations.
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