Many investors have abandoned Gauteng’s inner cities over the years in pursuit of greener pastures. Octodec Investments, however, has stayed the course. Though the CBDs have gone through several cycles of decline and revival since Octodec’s founder, the late Alec Wapnick, began buying buildings in downtown Pretoria in the 1960s, the company has consistently chosen to reinvent rather than retreat.
Today, its R11bn portfolio remains Gauteng-focused, with 50% of its assets located in the Pretoria and Joburg CBDs, making it one of only a handful of JSE-listed real estate investment trusts (Reits) with significant inner-city exposure. Octodec also owns The Fields in Hatfield, one of Tshwane’s largest student housing developments, with 1,400 beds, as well as several retail centres, including Woodmead Value Mart in Joburg.
Despite the challenges associated with poor municipal service delivery and crumbling infrastructure in Gauteng’s inner cities, the Wapnick family, still Octodec’s largest single shareholder, remains committed to its historic stomping grounds.
Octodec is doubling down on investments in Pretoria’s inner city, where it owns more than 100 buildings, some of which have stood vacant for years. Several of these properties have recently been repurposed or are undergoing redevelopment.
On a Tshwane site visit with Octodec’s management team, CEO Jeffrey Wapnick tells the FM that turning his back on the inner city was never an option.
“Why spend billions to rebuild cities from scratch elsewhere when we already have all the infrastructure in place? It doesn’t make financial sense to abandon inner cities, especially in a country like South Africa that has a shortage of capital.”
But he concedes that anyone wanting to play successfully in Gauteng’s inner-city property market has to be “bold and brave”. He says landlords must continuously adapt and innovate their product offering to meet changing consumer and tenant needs. Finding new uses for old, tired buildings has always been central to Octodec’s strategy, he says. “You need to keep up or you’ll be left behind.”
Wapnick is putting his money where his mouth is. In Lilian Ngoyi Street (formerly Van der Walt Street), a five-storey heritage building that once housed the post office, known as City Towers, is being transformed into the ultra-stylish I’Stayela Studios. Upon completion, the hair, nail and beauty bar concept will include about 60 salons of approximately 20m² each.
The pilot project is likely to be replicated in other buildings, given the rapid growth of the beauty and wellness sector, says Robert Gibson, COO of City Property, Octodec’s property manager.
“We are seeing huge demand from entrepreneurs who currently run their informal hair and beauty businesses from pavement kiosks,” he says.
Unlike traditional leases, where rentals and utilities are billed separately, I’Stayela tenants will pay an all-inclusive rate, which suits small business owners who need certainty around their overhead costs.
A few blocks away, the old INA Building in Francis Baard Street, adjacent to Louis Pasteur Hospital, stood empty for nearly two decades before recently reopening in its new guise as Health Connect. The development houses approximately 30 state-of-the-art medical suites and consulting rooms leased to doctors, dentists, physiotherapists and other health-care professionals, as well as a trendy coffee shop. The building has direct access to Louis Pasteur Hospital via a pedestrian bridge.
In nearby Sisulu Street, Octodec last year launched another pilot project, Yethu City, which introduced a novel rental housing concept to the Pretoria CBD.
Riaan Erasmus, deputy CEO and financial director of Octodec, says the R45m redevelopment was designed to address a gap in the market for first-time renters, students and young professionals who work in or near the city centre. Monthly rentals range from roughly R3,000 to R4,000 per person, inclusive of utilities.
Yethu City’s industrial-inspired design and contemporary aesthetic caters to the growing co-living trend, with a strong focus on shared amenities. These include a well-equipped kitchen, co-working and study spaces, a social lounge, a rooftop leisure and braai area, an outdoor gym and The Wash Bar laundromat. Tenants can choose between single and double rooms ranging from 8m² to 12m². Every four rooms share a communal bathroom.
“We wanted to offer a viable alternative for the guy who’s living in an informal settlement and spends two to three hours a day in a taxi getting to and from work,” says Erasmus.
Octodec also introduced innovative software at Yethu City, including facial recognition technology and smart systems to manage access, energy consumption and water usage. Erasmus says these tech-driven solutions have significantly reduced security and operating costs, with the savings flowing directly to Octodec’s bottom line.
Yethu City’s 199 beds were filled within 10 weeks of its launch in February last year. It was four times oversubscribed and remains virtually 100% occupied, which Erasmus believes highlights the chronic shortage of decent housing in the sub-R5,000-per-month market. “We believe there’s enough demand to create 20 Yethu Cities in Tshwane alone.”
Octodec has already identified Capitol Towers North, another Octodec-owned property ripe for repurposing, as the site of its next Yethu City project. The 12,000m² building in Madiba Street, vacated by the City of Tshwane in October, will accommodate more than 500 rental beds.
The redevelopment of inner-city buildings forms part of Octodec’s strategy to reshape its portfolio towards fewer, higher-value assets. In addition to finding new uses for older buildings, Octodec has been recycling capital through disposals, selling nearly 30 smaller, noncore properties, as well as Killarney Mall in Joburg, over the past 18 months. Management hopes to dispose of a further 60 buildings.
Octodec’s restructure is paying off. The company expects earnings growth of 3%-5% for the year to August 31, a welcome change to the past few years of declining earnings.
The market is taking note: Octodec clocked a hefty 88% total return in the 12 months to June 30 2026, placing it as the second-best performer (after Delta Property Fund) among the JSE’s property stocks. Still, Octodec continues to trade at a discount to NAV of nearly 32%, one of the largest in the sector, suggesting there’s still plenty of upside recovery to be had.