South Africa’s property sector is entering a new phase of sustained growth, with mixed-use developments leading the charge and outperforming broader market trends.


Driven by semigration, international demand and a supportive interest rate environment, this momentum is expected to continue into 2026. Yet as these integrated live-work-play precincts expand, so too does the complexity of managing risk. From established hubs like Century City and Melrose Arch to emerging developments, body corporates face evolving regulatory, financial and environmental pressures—making the choice of insurance partner more critical than ever.

Commenting on this is chief underwriting officer at Santam, Thabo Twalo, who says that mixed-use, sectional schemes offer an attractive mix of residential, commercial, and recreational areas within a single development. “This creates a vibrant and dynamic space that offers security, convenience, and lower maintenance costs,” says Twalo.

He points to examples like Century City, Cape Town’s central business district, Tyger Waterfront and the V&A Waterfront Marina, which have all seen an upward trend in prices, with annual growth in the double digits.

Younger buyers wanting convenience

Beyond convenience, security has become a major driver of younger buyers’ preference for mixed-use living. Centralised access control, on-site surveillance and managed precinct environments offer a level of safety and connectivity that aligns closely with the expectations of younger urban homeowners.

Despite increasing prices in the sector, Absa’s latest Homeowners Sentiment Index (HSI) for the fourth quarter of 2025 indicated that younger survey respondents (under the age of 44) were far more confident than their senior counterparts (over 55).

According to Twalo, South African Deeds Office data supports this – indicating that younger homeowners account for half of all property purchases.

He says this younger demographic of buyers supports the growth of mixed-use, sectional=title developments, where lifestyle options, convenience, security, and value are paramount.

Complex cover for multi-faceted entities

Modern mixed-use schemes often extend far beyond residential units, incorporating retail, offices, hotels and shared public amenities within a single precinct. These diverse uses rely on common infrastructure and governance structures, which can complicate insurance responsibility when incidents occur and reinforce the need for clearly defined cover and specialist expertise.

As the sector’s popularity increases, Twalo cautions that it’s crucial for owners and tenants to understand the intricacies of insurance claims for these types of properties.

“When something goes wrong in a sectional title – the roof leaks, floor cracks, a geyser bursts or there’s a small fire – who is responsible for fixing the damage?”

With so many stakeholders involved, he says that ownership of issues can get ‘blurry’, which can cause tension between trustees, owners and occupants.

What to do when something goes wrong

High density design and shared building services mean that claims in mixed-use developments can escalate quickly. Centralised plumbing, electrical systems and vertical construction increase the likelihood that water, fire or structural damage will impact multiple units or tenants at once, particularly as climate-related weather events intensify.

According to Twalo, the most common reasons for sectional-title insurance claims are geyser related issues, as well as storm damage. “With water shortages and the increased effects of climate change, claims for these types of issues are likely to only increase.”

He explains that a body corporate will usually have adequate cover for all the buildings within a sectional-title scheme – whether this be the individual housing units or common property areas – depending on the policy. “This means that if your unit’s roof is damaged due to extreme wind conditions, the body-corporate insurance pays toward the repair,” says Twalo.

“However, as the owner, you are responsible for initiating the claim via the body corporate,” states Twalo. When it comes to a tenant claim, he says the claim needs to go through the unit’s owner, before being taken to the body corporate for processing. “It must be signed off by a trustee or the managing agent. Owners should never claim directly from insurers. If an excess is due, the owner is responsible for paying it, according to the Sectional Title Act in South Africa,” adds Twalo.

Importantly, he adds that the sectional-title insurance cover only extends to the ‘brick and mortar’ part of residential schemes and common property, not moveable contents. “These must be insured by section owners or their tenants,” he says.

Well-located mixed-use developments typically benefit from stronger property-value growth, driven by foot traffic, tenant diversity and sustained infrastructure investment. As value rises, regular reassessment of insured amounts becomes critical, as stagnating valuation leaves rapidly appreciating schemes materially under insured.

Lastly, Twalo explains that sectional-title unit owners are entitled to transparency in terms of the valuation figures. “As a section owner, you can ask for the insured value of your property and request that this be increased (usually at the annual general meeting). This request should come with a recommendation to the trustees to check that the value of the entire building is correct. Body-corporate rules require that a scheme is never under-insured,” explains Twalo.

What to look for in a real estate insurer

Insuring mixed-use developments requires an indepth understanding of operational and emerging risks, including those related to security systems, digitally managed access control and cyber exposure. Insurers with specialised mixed-use experience are better positioned to support trustees with mitigation, policy structure and efficient claims handling.

When it comes to real-estate insurance, body corporates should choose an insurer with a robust track record and deep knowledge of the complex regulatory environment. “A good place to start is spending time understanding an insurer’s claim-payout history. You want an insurer with a good track record when it comes to paying claims.”

Being subject-matter experts is also critical. Twalo says that body corporates should not only seek an insurer with a deep understanding of legal and regulatory frameworks, but also one that adds value as a trusted advisor, rather than merely acting as a claims intermediary. “This extends to their approach to emerging risks in the real-estate market, such as cyber risks and climate shifts,” Twalo adds.

He adds that their product suite needs to be innovative and adaptive in response to this evolving environment.

Twalo concludes that a body corporate should look for an insurance partner, not just a provider. “As South Africa’s property sector evolves and expands, it's crucial for body corporates to work with an insurer that provides both sound technical and financial assistance, as well as a forward-thinking approach to the emerging real estate risk landscape.”

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