Latest Property Broker Survey by Sector Strategist at FNB Commercial Property Finance

3rd Quarter 2021 FNB Property Broker Survey of Rental Market Conditions – Brokers perceive higher activity in all 3 rental markets, but recovery momentum may be slowing.
In this report, we discuss the 3rd Quarter 2021 results of the rental market component of our FNB Commercial Property Broker Survey, which surveys a sample of commercial property brokers in and around the 6 major metros of South Africa, namely, City of Joburg and Ekurhuleni (Greater Johannesburg), Tshwane, Ethekwini, City of Cape Town and Nelson Mandela Bay.
Given FNB Commercial Property Finance’s strong focus on the “Owner-Serviced” market, a pre-requisite in selecting broker respondents is that they deal in owner-serviced properties, but a portion will also have dealings in the developer or investor markets as well as in the listed sector.
Firstly, we ask survey respondents to provide us with a rating of rental market activity as they perceive it, on a scale of 1 to 10, with 10 being the strongest level of activity. Similar to our Buying/Selling survey component, the rental market survey component still shows the highest levels of optimism emanating from the Industrial and Warehouse Property Market respondents. In this segment, the activity rating rose from 4.5 in the “Lockdown” 2nd quarter to 6.58 in the 3rd Quarter 2021 survey. However, during 2021 this sector’s activity rating has made little further strengthening progress since the 6.51 reading of the 1st quarter of this year.
The Retail Sector has also seen strengthening in its Market Activity Rating, from a 3.62 low in the 2nd quarter of 2020 to 5.31 by the 3rd quarter of 2021, the 5th consecutive quarter of increase. The Office Sector’s Activity Rating has risen far less significantly than the other 2 sectors, from 3.70 as at the hard lockdown 2nd quarter of 2020 to 4.03 as at the 3rd Quarter of 2021, leaving it very much in the doldrums with by far the lowest rating of the 3 major commercial property sectors.
While the Industrial and Retail activity ratings have both improved post-lockdown, only the Industrial Sector has managed to recover to an activity rating above its pre-lockdown 1st quarter 2020 level, while the Retail and most notably Office ratings remain below pre-lockdown levels.