News Research

Pressure-related selling / relocating easing in the commercial property market

Financial pressure remains the biggest single driver of movement and sales for property owners in the commercial market but, according to FNB’s Q1 2022 Property Broker Survey, this pressure seems to be alleviating as the economy continues to recover.

While the perception of property owners selling or relocating due to financial constraints remain high (36.7%), property brokers across South Africa’s six major metros, believe this to be improving (51.15% in the previous survey) – and noticeably from the post-lockdown peak during Q4 2020 with sales, in order to relocate to ‘bigger and better’ premises, increasing during Q1 2022 and exceeding pre-lockdown Q1 2020’s 18.4% – not far off from Q3 2019’s 22.4%, the highest level recorded since the start of the survey that year.

Relocating to properties closer to business markets has become even more of a priority. The estimated percentage of property owners, selling for this reason, rose for the second consecutive time, after prior declines, to 25.3% during the Q1 2022 survey, up from the prior quarter’s 23.9% which may point to the start of a more confident approach by property owners who have historically adopted a ‘wait and see’ attitude over the past two years. However, these levels remain low when compared to the 36.3% recorded at the beginning of 2019.

Pinpointing the greatest level of financial pressure-related selling or relocation regionally, Gauteng appears (on average) to have the worst readings when honing in on Tshwane – the highest reading for this survey at 57.1% of sellers while Greater Johannesburg was significantly lower at 40.7%.

Of the three coastal metros, Cape Town recorded the highest (worst) percentage of 29.8%, followed by eThekwini (24.5%) and Nelson Mandela Bay (19%).