Perceived commercial property broker satisfaction declines

Key points:

  • The fourth quarter of 2019’s FNB Commercial Property Broker Survey saw all three major commercial property sectors, i.e. office, industrial and retail, showing declines in perceived market activity levels.
  • The percentage of respondents perceiving business conditions to be satisfactory declined for the third consecutive quarter, from 49% in the third quarter to 31% in the fourth quarter.
  • When asking brokers for their ratings of market activity levels on a scale of 1 to 10, FNB noticed that the group of respondents are most upbeat (or least pessimistic perhaps) about the industrial and warehouse property market. However, industrial property’s fourth quarter activity rating did decline noticeably, recording 4.71, down from 5.25 in the prior quarter’s survey. By comparison, the Retail Property Activity Rating was noticeably lower at 4.14 in the fourth quarter, down from the prior quarter’s 4.51, while the office property market also declined from 4.62 in the third quarter to a lowly 4.06 in the fourth quarter survey.
  • FNB’s “Indices for Perceived Change in Market Activity over the Past Six Months” were all negative (i.e. perceived activity declines on an aggregated basis) in the fourth quarter survey. The market with the highest index reading was industrial property, although this was nevertheless still a weak reading of -12. The Office Sector Index reading was a negative of  -36, implying that the percentage of respondents perceiving a decrease in activity in this sector exceeded those perceiving an increase by 36 percentage points. The retail market returned the weakest reading of the 3, a negative -52.
  • The Property Market Activity Near Term Expectations Indices, reflecting broker near term expectations, saw the respondents as a group being least optimistic about the retail property market, which recorded a negative -6, whereas the industrial property market recorded a +22 and the Office Property Market +8.