Commercial property brokers’ confidence increased moderately for a second straight quarter in the three months to end-December, according to FNB Commercial Property Finance, though the level remains below the neutral level.
FNB Commercial Property Broker Survey indicates that 46% of respondents regarded market conditions as satisfactory, up from 44% in the prior period.
“However, while mildly improved, this most recent level of broker business confidence remains very weak,” according to the survey.
The minor rebound mirrors trends seen in the broader economy, as reflected in the RMB/BER business confidence index (BCI), which rose to 45 index points in the fourth quarter of 2024, up from 38 in the third quarter.
Two of the three major commercial property markets — office and retail — reported stronger sales activity in the fourth quarter, compared to the third, with the industrial market being the exception.
“The office market saw its fourth quarter 2024 sales activity reading rise to a stronger level than its previous post-Covid 19 high for the first time. When it came to fourth quarter broker perceptions of the sales activity trend over the past six months, on average the brokers perceived all three markets to be stronger than six months prior,” the survey states.
The industrial market was the exception though, experiencing a drop in sales activity in the fourth quarter, and the lowest score regarding the outlook.
The retail property activity rating increased to 4.57 points in the fourth quarter from 4.26 points in the previous period, but remains below its multiyear peak of 4.9, recorded at the end of 2023.
The office property market has seen some improvement in sales, possibly as a result of the Reserve Bank cutting interest rates for second time in November, but demand drivers remain unclear. Nationally, office space demand remains weak, with drops in the finance, real estate, and business services sector.
FNB said the readings appeared consistent with the direction of recent sales activity ratings in the retail and office markets, but perhaps slightly contradictory to the weakening direction of the most recent industrial sales activity rating.
National economic growth remains sluggish, notwithstanding a boost in optimism after the formation of the government of national unity (GNU) and a stable electricity supply compared to 2023 and some reported improvements in transport and logistics.
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