Melrose Arch, now owned by Standard Bank following its acquisition of Liberty Two Degrees, has reduced vacancies to just 0.5% after securing more than 45,500m² of new and renewed leases over the past year, bucking weak conditions in Johannesburg’s commercial property market.The performance comes as the city’s office sector continues to battle high vacancy rates, weaker tenant expansion and the lasting effects of hybrid working, forcing many landlords to reposition or convert ageing office buildings.“Our vacancy rate had reduced to just 0.5% as of July, reflecting exceptionally strong demand. Leasing activity has been driven by blue-chip corporate occupiers, while the strongest retail demand has come from the beauty, health and wellness sectors,” said head of leasing and legal at Melrose Arch, Kirsty Williams.The strong leasing momentum translated into higher trading performance, with annual tenant sales increasing by between 5% and 8% over the past year. Luxury retail, beauty, health and wellness recorded the strongest growth as the precinct continued to refine its tenant mix, the group said.Leasing activity has been driven by blue-chip corporate occupiers, while the strongest retail demand has come from the beauty, health and wellness sectors— Kirsty Williams, head of leasing and legal at Melrose ArchAccording to the latest FNB commercial outlook, Johannesburg is showing a notable improvement after subdued activity over the past two years as trading conditions gradually stabilised in retail property, however Cape Town and Nelson Mandela Bay remain the strongest-performing markets in this segment. The mixed-use precinct has invested about R150m over the past three to five years in infrastructure upgrades, redevelopment projects, energy efficiency and sustainability initiatives as landlords increasingly compete on operational resilience rather than location alone“These investments are part of our long-term strategy to continuously enhance the quality of the environment and ensure the precinct remains relevant, resilient and attractive to investors, occupiers and visitors,” said MD of Melrose Arch, Natalie Stewart. The investment is beginning to reshape the precinct’s retail offering. About 2,190m² of space in the Retail Galleria is being redeveloped into eight boutique stores as Melrose Arch pivots away from large-format retailers towards smaller, experience-driven brands aimed at capturing changing consumer behaviour. The first tenants are expected to open in September.Hospitality remains another growth engine. The precinct’s four hotels, comprising more than 700 rooms, recorded average occupancy of about 80% over the past year, generating steady foot traffic for restaurants, retailers and entertainment outlets.Stewart said hotel guests had become an increasingly important source of retail and food-and-beverage spending, reinforcing the commercial value of the precinct’s integrated live-work-stay model.Looking ahead, Melrose Arch is positioning hospitality and residential property as key to its next phase of expansion.“We see the greatest growth opportunities in hospitality and residential, where demand continues to exceed available supply. Both our hotel offering and residential stock are effectively at capacity, reinforcing the strength of the Melrose Arch mixed-use model and supporting future expansion,” said Stewart.The leasing momentum reflects a broader shift in Johannesburg’s commercial property market, where occupiers are gravitating towards integrated mixed-use precincts as secondary office buildings continue to battle weak demand and high vacancies.