Consumer Information

Author: FNB
23 September 2020


The continued FNB Commercial Property Broker Survey for 2020’s third quarter results surveys a sample of commercial property brokers in and around the six major metros of South Africa which includes the City of Johannesburg and Ekurhuleni (Greater Johannesburg), Tshwane, eThekwini, the City of Cape Town and Nelson Mandela Bay.

FNB’s pre-requisite in selecting broker respondents is that they deal in owner-serviced properties with a portion dealing in the developer or investor markets and the listed sector.

FNB deals with questions relating to the perceived balance or imbalance between the demand and the supply of properties being transacted in the main markets. Market ‘strength’ refers to a relatively strong demand level relative to supply and vice versa for the market ‘weakness’. The questions included estimates of average times of properties on the market prior to sale as well as the perceptions of whether demand exceeds supply or vice versa.

The key themes that emerged from these results include:

  • The industrial property market appears to be the strongest of the three major commercial property sectors i.e. industrial, retail and office.
  • The very weak perceived demand-supply balance in all three property classes has continued in the third quarter survey.
  • The industrial property market appears to be strong in the three coastal metros i.e. Cape Town, Nelson Mandela Bay, and eThekwini. Gauteng’s metro regions are the areas of relative weakness with Johannesburg being particularly weak.
  • In the office and retail property sectors there is little to choose from between the five metro regions with all of them showing very weak market balances.
  • Given a greater bias towards ‘oversupply’ in all three major commercial property markets, FNB anticipates a greater magnitude of negative ‘all property’ capital growth for 2020 of between -5% and -10% following on a more mild -0.2% in 2019 (using MSCI historic data).
  • The office property sector appears to have overtaken retail property in terms of becoming the weakest of the three major property classes with the ‘Zoom Boom’, remote working and potential company scaling down of office requirements, overshadowing the online retail challenge for retail property.

The original article can be viewed here