South Africa's exit from FATF grey list: A turning point for eager property investors

Source: Supplied. John Jack, chief executive officer of Galetti Corporate Real Estate.

With investor sentiment rising, industry leaders say the delisting signals renewed growth opportunities and stronger prospects for real estate investment.

“This update restores credibility and lowers perceived risk, both of which are critical for property investment and development. This is a pivotal moment for investors looking to capitalise on reawakening market sentiment," says John Jack, chief executive officer of Galetti Corporate Real Estate.

Getting out of the grey

In February 2023, South Africa was placed on the Financial Action Task Force (FATF) grey list due to shortcomings in anti–money laundering and counter–terrorism financing frameworks.

“This increased international scrutiny, raising our borrowing costs and complicating cross-border transactions,” notes Jack.

However, over the past 18 months, government, regulators and the private sector have worked to address these deficiencies, introducing key reforms that provide greater transparency around beneficial ownership, tighter supervision of non-financial sectors such as real estate and law, and a stronger enforcement environment under the Financial Intelligence Centre.

“These collective efforts have paid off, with the delisting showing that South Africa can meet international standards. The benefits of that co-ordination will now ripple through the economy, starting with property,” adds Jack.

An improved climate for investment

The immediate outcome of South Africa’s grey-list exit is an improved risk rating. “This means a more favourable environment for businesses and investors, particularly in capital-intensive sectors such as commercial property. Access to finance becomes easier, foreign capital inflows face fewer barriers and transaction timelines shorten.”

Jack notes that this renewed confidence will likely prompt further infrastructure upgrades across logistics, ports and transport, enhancing the long-term case for commercial property investment, while investors who previously hesitated due to compliance uncertainty are likely to re-engage.

“As global interest returns, South Africa’s established property nodes - such as Johannesburg’s northern suburbs, Cape Town’s CBD and waterfront, and Durban’s logistics corridor – will undoubtedly experience increased demand,” Jack says.

Commercial sector prepares for growth

According to Jack, the commercial property sector has shown remarkable resilience in recent years. While the pandemic and macroeconomic challenges impacted office and retail performance, industrial, logistics and mixed-use assets have outperformed expectations.

“The stabilising of inflation, moderating interest rates and improved energy reliability have also better positioned South Africa’s property market for its next growth phase, with the commercial sector showing incredible promise.”

This was noted in The South African Property Owners Association’s Office Vacancy Report Q1 2025, which showed vacancies were easing, while prime-grade space improved to 6.8% – reflecting a sector firmly in recovery.

Markets & Investment

The Reserve Bank's rate reduction: A new chapter for the South African economy?

Katja Hamilton  20 Nov 2025

“The market is in an upward trajectory, and the timing of South Africa’s delisting could amplify that momentum,” notes Jack. “We expect to see renewed appetite for income-producing assets and development opportunities that align with sustainability, accessibility and long-term tenant demand.”

Why now is the time to invest

While Jack notes that the grey-list exit is not a silver bullet for all economic challenges, it removes a major hurdle that had been influencing sentiment.

“The benefits will take time to filter through, but they create an enabling environment for deal-making,” says Jack. “We’re already seeing strong interest in well-located commercial assets that offer secure income streams and growth potential. This is the right mix for investors.”

Leasing activity has also begun to strengthen as businesses return to physical offices and hybrid models stabilise, with the latest PayProp Rental Index indicating tenant arrears are at their lowest, dropping to 16.9% nationally.

Because of this, Jack says that well-positioned properties near transport links, lifestyle amenities, and residential hubs - such as Houghton, Hatfield, and Century City - are now gaining significant attention.

“We anticipate that the commercial segment will remain highly active as investors move to capitalise on the positive momentum,” concludes Jack. “Auctions provide a transparent and efficient way to acquire these quality assets while sentiment is rising.”