FNB | Property Broker Survey – 4th Quarter of 2020 Part 1
The 4th Quarter of 2020 FNB Commercial Property Broker Survey saw all 3 major commercial property sectors, i.e. Industrial and Retail, showing slight increases in perceived market activity levels, with the Office Property Market’s Activity Rating still the weakest, and Industrial remaining the strongest.
The percentage of respondents perceiving business conditions to be satisfactory declined in the 4th quarter survey to a very weak 21%, down from 31% in the previous quarter, following a mild 3rd quarter increase as the country emerged from the 2nd quarter hard lockdown.
When asking brokers for their ratings of market activity levels on a scale of 1 to 10, we still see that the group of respondents is most upbeat (or least pessimistic) about the Industrial and Warehouse Property Market. The Industrial Property Market’s 4th quarter activity rating rose slightly, from 4.64 in the prior quarter to 4.68 in the 4th quarter. The Retail Property Activity Rating also increased, from 3.37 to 3.59 over the same 2 quarters. The Office Property Market Activity Rating remained the weakest of the 3, but also rose slightly from 2.97 to 3.32.
The Near Term Expectations Indices of Property Market Activity, reflecting broker near term expectations, saw the respondents being least optimistic about Office Property, which recorded a mild positive of +12, while the Industrial Property Market recorded a stronger +19. The Retail Sector response surprised, with brokers posting the strongest response in this sector, to the tune of +27.
In all 3 major property markets, the brokers saw the negative economic impact from COVID-19 lockdowns as still being a major influence on their near term market activity expectations. However, in the Office Sector, the lockdown-related “Zoom Boom” and its potentially major “work from home” implications continued to overshadow even the recession impact, playing a major role in brokers continuing to be least optimistic about the Office Market. The impact of online retail in the Retail Property Sector is seen as far less significant than the “work from home” impact on the Office Market.