As South Africa’s commercial property sector regains momentum, rising electricity costs threaten to erode returns across portfolios. For large property owners and managers, tariff optimisation offers a practical, zero-capex way to reduce energy spend, improve recoveries and strengthen asset performance at scale.
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After several years of sluggish performance, South Africa’s commercial property sector is beginning to regain momentum.
However, continued above-inflation increases in the cost of electricity may threaten to undo any real gains that property investors and portfolio owners hope to achieve in the foreseeable future.
For context, Eskom’s latest tariff increase, which comes into effect this week, will see direct customers paying around 8.76% more on average, and municipal customers paying around 9.01% more from 1 July 2026.
Ensuring that properties are billed according to the optimal tariff structure is a key first step in reducing one of the most significant operating costs across commercial property portfolios.
Tariff optimisation offers commercial property firms an opportunity to reduce electricity spend at zero capital cost.
Electricity tariffs in South Africa are highly complex, with over 900 different tariff structures that can be applied depending on the type of property, tenant profile and business activity.
In our experience, it is no surprise that many commercial properties are not billed according to the optimal tariff.
In fact, we have seen that large energy users and multi-site property portfolios could cut their electricity spend by 5% to 10% through this intervention alone, without upfront capital investment or changes to tenants’ daily operations.
For large property companies, the impact of getting this right extends beyond a single building. Across diversified portfolios, even relatively small improvements in tariff alignment can translate into meaningful savings, stronger recoveries and improved asset-level performance.
Commercial property firms, REITs and developers that have the ability to conduct detailed tariff audits and ensure each property and tenant is billed correctly could gain a competitive advantage as the market continues to recover.
With that said, placing a property on the optimal tariff structure requires a considerable amount of specialist knowledge.
Not only does it involve in-depth audits of electricity use and unpacking complex tariff structures to ensure optimal billing, but it also requires engagement and negotiation with municipalities.
The skills required to achieve this do not typically exist within most property businesses.
It requires specialist capability to assess electricity usage, evaluate tariff structures and engage effectively with municipalities where needed.
For large property portfolios, the financial impact of accurate tariff structuring can be significant.
This approach is therefore one of the most practical first steps in reducing energy spend. Commercial property firms and developers are rightfully allocating more capital to invest in sustainable technologies and renewable energy.
However, while that capital is being raised and deployed, tariff optimisation offers real savings from day one and requires no installations, no operational changes, and zero upfront capital.
This service can be paid for through a percentage of a company’s energy savings for a limited period.
From there, this relatively small measure continues to deliver value year on year across the life of the asset and, in the case of large portfolios, across multiple properties.
In a market where performance is measured across portfolios, not just individual properties, commercial property companies cannot afford to overlook avoidable electricity costs.
Tariff optimisation should not be seen as an administrative exercise, but as a practical and immediate opportunity to improve recoveries, protect margins and strengthen portfolio performance.
As the sector works to rebuild momentum, getting the tariff structure right may prove to be one of the simplest and most commercially effective interventions available.
Manie de Waal, CEO of Energy Partners.
Manie de Waal is the CEO of Energy Partners.
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