News Research

Property brokers remain pessimistic as business confidence declines

Property brokers

2021’s third quarter FNB Commercial Property Broker survey has once again, highlighted a weak office market and a strong industrial market.

The percentage of property brokers surveyed perceiving business conditions to be ‘satisfactory’, declined to 25%, down from the previous quarter’s 27% – largely reflecting weak business confidence across the broader economy.

When asked to rate market activity levels on a scale of 1 to 10, those surveyed are still optimistic about the industrial and warehouse property markets. However, the industrial property market’s Q3 activity rating declined mildly from 5.47 in Q2 to 5.25.

The retail property activity rating also declined, from 4.38 to 4.09 over the same two quarters and the office property market activity rating remained the weakest of the three, declining from 3.63 to 3.35.

‘Near-Term Expectations Indices’ of property market activity saw property brokers being the least optimistic about the office asset class which recorded a value of +7 while the industrial property market recorded +15. The retail sector response was in between the former two quarters with a reading of +13.

In all three property markets, the brokers still saw the economic impact from the Covid-19 lockdowns as a major influence on their near-term market activity expectations.

However, the Work-From-Home (WFH) movement is also believed to be influencing a portion of businesses planning to downscale their space requirements while the office sector is also heavily impacted by recent job losses in the Finance, Real Estate, and Business Services (FREBS) Sector.

The impact of online retail is seen as far less significant than the WFH impact on the office market.