The industrial and retail property markets were perceived to be ‘under supplied’ during Q2 2024, according to property brokers surveyed by FNB Commercial Property Finance.
Demand-supply perception of the retail property market has turned positive for the first time since the survey started at the beginning of 2019. This leaves a hazy picture as to whether the retail property sector or the industrial property sector is the strongest of the three major commercial property sectors.
The perceived market strength of the retail sector differs significantly by metro region. While demand is perceived to exceed supply in Cape Town, eThekwini, and Tshwane, Greater Johannesburg and Mandela Bay are perceived as ‘oversupplied’.
Square meterage of retail building plans passed for the twelve-month period to April 2024 were -32.5% lower than the multi-year high reached for the twelve months to April 2018.
The industrial property market‘s demand has been perceived as being predominantly stronger than supply since the beginning of 2022.
The brokers perceived industrial assets to have the shortest average time on the market for occupied properties – 13.48 weeks quicker than retail’s 16.65 weeks and office’s 24.5 weeks.
Vacant industrial properties also averaged the shortest time on the market – 14.24 weeks compared to retail’s 17.24 weeks and office’s 25.19 weeks during Q2 2024.
Square meterage of industrial building plans passed for the twelve-month period to April 2024 were -32% lower than the multi-year high reached for the twelve months to November 2018.
The office property market remains perceived as the weakest with a significant oversupply. Square meterage of office building plans passed for the twelve-month period to April 2024 were -71.4% lower than the multi-year high reached for the twelve months to June 2017.
